Maximizing the value of a business through accelerated M&A+
As economic uncertainty continues across Europe, stakeholders are likely to be thinking about the future viability of their businesses and shareholder value. This economic volatility is set to accelerate as countries move out of lockdown and begin to restart the economy.
At this point, as working capital requirements begin to increase, some businesses will struggle to build up stock, re-employ their workforce and generate sufficient revenues to ensure long-term security. As shareholder resources are depleted and external new sources of finance are exhausted, the traditional option of an accelerated M&A process (AMA) will come to the fore.
The idea of an efficient AMA process to find new owners of a business is in principle sound. These new owners will ideally have sufficient capital or resources to secure the future of the business. The expeditious nature of the AMA process allows a quick solution to be found when the underlying economic and financial pressures build up.
Short timelines lead to poor outcomes
this traditional AMA process often results in poor outcomes for all stakeholders.
However, this traditional AMA process often results in poor outcomes for all stakeholders. By their very nature, these processes have very short timelines and there is often insufficient time to find the best solution for the business. Indeed, many AMA processes focus on a standardised shortlist of serial acquirors rather than a strategic, targeted and sector-driven marketing process. As a result, often an AMA transaction is a precursor to a formal insolvency process which rarely delivers shareholder value. Moreover, the lack of time means that the commercial terms of the transaction are often insufficiently explored, and value is lost.
AMA+ maximises value through tailored strategies
Whilst these AMA processes have their place a far more effective approach is AMA+. A Clearwater AMA+ process ensures value is maximised and an acceptable outcome for all stakeholders is obtained through a more considered AMA process. A Clearwater AMA+ transaction is a tailored process utilising our team’s sector and situational experience to find strategic partners. With an International reach and managed by a senior team on an extremely focussed timetable, the process is measured in weeks not days. By engaging earlier with experienced, sector-driven advisors an AMA+ process will in all likelihood deliver better outcomes for all stakeholders.