For Companies.
Transaction Services for Corporate Clients
Due to our team’s flexibility and experience, the exact type of transaction is only of secondary importance. We can assist you in a broad spectrum of transactions, including the sale of your business, the implementation of greenfield business plans (e.g. the development of a new business unit) the execution of classic M&A transactions (e.g. the acquisition of another company), or starting a new business. However, our focus is on the SME and mid-market companies typical for the DACH region, including young businesses (start-ups).
A common example from the mid-market is the sale of a business, e.g. as part of a shareholder succession plan.
Transaction Support in a Company Sale Process
As part of a transaction support engagement, we carry out various services and activities on behalf of our clients to ensure that the planned sale process runs as smoothly as possible. We also engage and manage external experts, such as lawyers and tax advisors, for this purpose, as required.
Transaction support typically includes the following workstreams:
- Due Diligence: Transaction support often begins with a thorough due diligence review. This includes analysing the financial, legal, operational and tax aspects of the company to develop an understanding of the status quo and to identify potential risks and opportunities associated with the business model.
- Company Valuation: We determine a realistic valuation of the company as a basis for determining an appropriate sale price. We can use various valuation methods, such as the capitalised earnings value method, comparative analysis based on similar companies, or the dividend discount method based on a financial model developed for the transaction. The most suitable valuation method may vary depending on the sector and the characteristics of the company.
- Sales Strategy: We help you develop a sales strategy that best serves your interests as a seller. This typically includes identifying potential buyers, preparing sales documentation in line with the strategy and determining the best go-to-market strategy.
- Negotiation Phase: We will assist you in negotiating with potential buyers. This includes discussing price, other commercial terms, warranties and other important contractual details. Depending on your wishes, we can run the entire negotiation process for you. At all times, we will keep you fully informed of all material developments.
- Contract Management: We can support you in drafting and reviewing the sales contracts and other documents relevant to the sales process to ensure that all legal and financial aspects of the transaction are adequately documented and considered. Here, we ensure that the commercially negotiated terms of the transaction are appropriately reflected in the legal documents.
- Financing and Payment Structuring: We can help you with financing aspects related to the sale of the business. This can include refinancing your company’s existing credit facilities prior to the transaction as well as selecting the best acquisition financing options for potential buyers. Our assistance with the financing of your business and the transaction will help you achieve the optimum sale price for your business. Regarding the payment of the purchase price, this can take the form of one-off cash payments or instalments, as well as the transfer of shares in the buyer or earn-out components. We make the various options comparable for you.
- Integration: After completion of the sale, our transaction support can assist you during the subsequent integration phase to ensure that the company is smoothly transferred to the new owner. We can take the burden off your shoulders here so that, from your point of view, most of the work is done when the sale and purchase agreement is signed.
- Tax and Legal Aspects: We can engage tax and legal experts on your behalf to optimise the relevant aspects of the transaction and ensure that an efficient transaction structure is chosen that complies with all applicable laws and regulations, so that no unexpected events occur after completion.
- Risk Management: Already in the preparation phase of the transaction and throughout the remaining process, we help you to identify potential risks and take measures to minimise or manage all identified risks. We want to work with you in the most efficient way to achieve a legally compliant transaction on optimal terms.
- Process Management: We can coordinate the entire sales process for you and monitor the adherence to the planned time schedule, ensuring that all the necessary steps are completed on time, so that you reach your goal within the envisaged time frame.
Overall, our transaction support aims to make the sales process as efficient and successful as possible in order to protect the seller’s interests and ensure a successful completion of the transaction on the best possible terms for our client.
Practical Example
In order to better understand the process of our transaction support in practice, we illustrate this for you here in a simple application example:
Let’s assume a medium-sized company from the DACH region called “ABC Maschinenbau” wants to sell its business to a larger competitor “XYZ Manufacturing”.
In this scenario, the transaction support would be as follows:
- Initial Advice: ABC Maschinenbau engages DTRAG to plan the sale process. We work closely with the shareholders and management of ABC Maschinenbau to understand the seller’s objectives and expectations.
- Due Diligence: DTRAG begins with a comprehensive due diligence review of ABC Maschinenbau. This includes a review of financial records, contracts, operations, customer relationships, products, the company’s market position and other relevant information.
- Valuation: On the basis of the due diligence exercise, we prepare a valuation of ABC Maschinenbau and propose a sales price to the shareholders. We explain the basis of our proposal to the shareholders. This price will naturally play an important role in the negotiations with XYZ Manufacturing.
- Sales Strategy: Together with ABC Maschinenbau, we develop a sales strategy. This identifies potential buyers, including XYZ Manufacturing, and prepares sales documents that present ABC Maschinenbau’s business attractively and accurately. In doing so, we ensure that we identify more than one potential buyer and thus create appropriate competitive pressure.
- Negotiations: Once XYZ Manufacturing has been identified as a serious bidder following the submission of an indicative offer, the negotiation phase begins. We represent the interests of ABC Maschinenbau and negotiate the sales price, payment terms and other contract details with XYZ Manufacturing.
- Contract Management: Once the parties have agreed on the terms of the sale, we support the shareholders of ABC Maschinenbau in drafting and reviewing the sales contract. This contract usually includes a variety of clauses and conditions that formalise the sale and therefore it needs to be carefully reviewed.
- Financing and Payment Structuring: We assist ABC Maschinenbau in arranging new debt to finance the transaction and the shareholders in negotiating the payment structure for the transaction. Here, the shareholders of ABC Maschinenbau can decide whether they would prefer to receive a cash payment or join the group of shareholders of XYZ Manufacturing at completion.
- Integration: Once the transaction has been completed, we support ABC Maschinenbau and XYZ Manufacturing in the smooth integration of the two companies. This may include merging operations, adapting a new corporate structure and communicating with employees and customers.
- Tax and Legal Aspects: We ensure for the shareholders of ABC Maschinenbau that all tax and legal aspects of the transaction are properly handled to minimise potential legal and tax risks.
- Risk Management: Throughout the process, we work with ABC Maschinenbau to identify potential risks and develop strategies to minimise them.
- Process Management: We have developed a specific timetable for the process with the shareholders of ABC Maschinenbau and ensure that all parties involved in the process adhere to it.
The transaction support only ends once the sale has been successfully completed and ABC Maschinenbau has been successfully transferred to XYZ Manufacturing. Throughout the process, we can play a key role in ensuring a smooth and successful sale of the company.
Contact Us
We are happy to guide our clients through the entire transaction process, including negotiations with shareholders and the management of target companies.
If you would like to find out more about this topic, please contact us at any time on kontakt@dtrag.de. We look forward to getting to know you.