Below are some critical questions decision-makers should ask:

Key Questions

• Is an acquisition the most appropriate action now and in the future?



• What are we actually buying?



• Who is the best candidate to buy?



• How much should I pay for the business?



• Where am I going to capture and/or create value?



• How am I going to capture and/or create value?



• How thorough should the due diligence be?



• What are the tax and accounting consequences?



• How will I know that the transaction created value and achieved its objectives?

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How we can help

The commonly held assumption that all acquisitions should be executed the same way overlooks the widely dissimilar objectives and circumstances that drive acquisitions.

Leadenhall can help you take a systematic but tailored approach to the acquisition process. We are able to support you at each of the critical steps before, during and after the transaction, as follows:

• Independent Strategic Assessment
  
  • Clarify objectives and define target criteria
  
  
  • Identify risks and opportunities

• Plan and Manage The Transaction
  Planning and efficient management of the entire process is crucial to the success of the transaction. Leadenhall is able to co-ordinate the range of expertise needed, manage confidentiality and lead the overall process, freeing you up to manage your existing business.

• Strategic Screening
  A focused search that not only identifies the right targets but also gives buyers a head start on the due diligence process. Our focus is on target company's markets, customer relationships, competitive position and strategic direction.

• Commercial Review/Due Diligence
  Due diligence is more than just verifying the representations of the target company or an evaluation of the company's historical actions. The key driver of the merit of a transaction is the expected value of the future cashflows attributable to the acquired company.


Leadenhall can determine the future benefit to you by performing:


• Valuation Analysis to forecast the stand alone value of the target; and to add revenue, cost, and balance sheet synergies associated with your ownership of the target.



• Sensitivity Analysis to highlight the most critical factors driving the valuation (often a few critical assumptions); to quantify the size of the economic risk and as an aid for what to focus on post-acquisition (integration).

• Setting a Price
  Once a buyer has zeroed in on acquisitions in line with its strategic goals, the buyer needs to assess price tags. The formula for assessing a business is:

Stand Alone Value

+

Value of Synergies

-

Transaction Costs

-

Integration Costs

The challenge lies in putting numbers into this equation. Leadenhall can determine values by forecasting the stand-alone value of the target and identifying revenue, cost and balance sheet synergies associated with your ownership of the target.

• Support the execution
  There are many different ways to structure a transaction. Leadenhall is able to analyse each structure, from a financial perspective, to determine the optimum outcome.


Leadenhall are skilled negotiators. Often the negotiating environment becomes emotionally charged. In these situations it is often helpful to have an independent third party negotiating on your behalf.

• Post-Transaction Review
  Measure the financial and operational performance following the transaction.

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• Acquisition search and negotiations on behalf of a major international publisher.



• Review of financial information and the corporate structure of a tooling company. Advice to a potential purchaser on a purchase structure outline and assistance with negotiations.



• Review of the potential for a management buy out of an importer and distributor of equipment. Advice to the major shareholder and to the General Manager of issues to be considered.



• Target search and screening on behalf of a US corporate seeking an Australian corporate in the financial services/transaction processing business.



• Search for acquisition candidates in the IT industry, review of potential targets, discussions with principals and negotiation through to Heads of Agreements on behalf of a major US corporation.



• Preliminary overview valuation and then detailed appraisal and negotiation of an acquisition of a financial planning company for a large financial services Group. Advice on contract and due diligence.



• Advice to British Aerospace Australia Limited on their $54 million acquisition of AWA Defence Industries Limited - including valuation issues, acquisition procedures, due diligence investigations and deal documentation.



• Evaluation of past and expected performance of the container terminal at Outer Harbor No 6 (S.A.). Subsequent negotiations and successful acquisition of the assets and operations of the container terminal from the P&O Group.



• Evaluation, negotiation and acquisition of Eden Technology in NSW on behalf of the US defence corporation, Space Mark.



• Review of the potential acquisition of a private company by a public company in order to secure a production base and additional product lines. Re-assessing the original strategy and negotiating an exclusive marketing arrangement to obtain the benefits required by the client in terms of securing additional product lines.



• Acting for the vending shareholders in a management buy out of a large, established family Group of companies; negotiation of the transaction.



• Advice to a public company on alternatives for structuring an acquisition of a group of loosely associated businesses. Considerations included formation of separate company, issue of rights to existing shareholders, private placements and bases of evaluation of the businesses to be acquired.



• Advice on structuring the acquisition of an interest by the Australian subsidiary of an overseas parent in the business operations of a locally owned company. Advice on due diligence tasks to be undertaken by the acquirer's auditors.



• Review of estimated profitability of an operation; development of potential acquisition routes and advice to acquirer on strategies, tactics, information requirements, analyses, pricing and negotiation.

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