Mergers, Acquisitions, Transitions and Recapitalization

A key part of business ownership is planning for the future. If you are in growth mode, you may consider growth through acquisition, as opposed to purely organic growth. Growth by acquisition can accelerate your plans but can bring its own challenges in integration. Chetanya can help you through every step of this process. You may be at a point in your life, where you’re ready to divest the business or transition it to the next generation. This process can be emotionally exhausting disruptive and difficult on many levels. Chetanya can guide you through the best approach and plan for the future. If your business needs capital for growth or a pivot or simply to weather a downturn and traditional banking is either not the right option or desireable for you, seeking alternative forms of debt/equity recapitalizations may be an option. Chetanya can help you determine the best approach for your business and its needs and can help find the right partner to bring capital and resources into your business without sacrificing your ability to execute your vision.

The M&A process can be daunting, the terms foreign and the process difficult. Some key factors for consideration include:
  • Business Valuation (EBIDTA Multiple, Discounted Cash flow basis, Revenue Multiple basis etc.)
  • Deal Structure (Asset v/s stock deal, Cash v/s Stock deal, Earn Outs and Holdbacks etc.)
  • Working Capital Considerations (Avg. Working Capital, Working Capital Adjustments, Escrows)
  • Representations and Warranties (Guaranty Escrows thereof)
  • Consulting or employment contracts post-deal and non-competes
  • Inventory valuation and checks
  • Post-deal planning, operations integration, structural, management, back office etc.

When contemplating a merger or acquisition, planning is one of the most critical parts of the process. As Dwight Eisenhower once said, “Plans are worthless. Planning is everything!” The process of planning is the most critical part of the exercise as it brings to light all issues to be considered. The plan itself, while a good starting point, remains flexible and adaptive.