Subject: Client is evaluating an offer to sell business
A Client received an offer by its main competitor to acquire his business unit in a specific country. The offer seems fair but he has indications that the competitor might go higher if certain unusual conditions can be met.
Our Task Was
The client wanted us to give him a sound valuation of his company and understand the unusual conditions that the buyer has proposed.
What We Did
We divided the work in two areas, 1) the valuation of the company and 2) the analysis of the competitor and the conditions that were proposed.
- Valuation: The valuation work was very standard since the company had all its record in order and up-to-date which is not always the case in this industry, especially with smaller entities.
- Discovery: We investigate the competitor and interviewed past employees
A local colleague was engaged to interview the past employee’s of the acquiring company.
The valuation was done but the sale did not take place.
We found out that the acquirer’s intentions were not to culminate the purchase after the Due Diligence phase but gain access to information about clients but most of all the company’s agent network.
The acquiring company wanted to open branches next to important agents and needed the information to successful attract agent customers.
The CEO was very pleased with our work which thwarted the acquirer’s plot and the valuation helped the company find, sometime later, a suitable buyer.
* Note: The case studies are real although we have changed some of the details to respect the privacy of our clients.