The final steps in M&A transactions

Once the buyer and seller have declared their intention to enter into the transaction in a letter of intent, the decisive phase begins: due diligence.
Only after this intensive examination phase has been successfully completed is the final contract formulated and the signing can take place.
Wilco Früh, co-founder and managing director at Emporion, provides insights into the proverbial last few meters before the finish line and warns of potential stumbling blocks.

The importance of due diligence in the M&A process

Due diligence is the phase in which the potential company to be purchased is subjected to intensive scrutiny.
Various aspects are examined, including legal, tax, financial, operations, environmental health and safety due diligence.
Emporion is in charge of the entire project management, involving external specialists such as auditors, lawyers and environmental engineers.
This holistic approach enables an in-depth analysis.

Surprises and early detection of risks

Wilco Früh emphasizes that surprises during due diligence are rare.
Thanks to Emporion’s many years of experience, potential risks can be identified at an early stage.
The disclosure of risks is discussed prior to the due diligence and particular attention is paid to potential challenges.
Early communication with both parties creates clarity and trust.

“With our decades of experience, we can usually spot the white elephant in the room at an early stage. Long before we start the due diligence process, we pay particular attention to potential risks and discuss them with the buyer and seller at an early stage.” Wilco Früh, Managing Director Emporion GmbH

Completion rate and challenges

Before coronavirus, Emporion had a 100% completion rate after the letter of intent (LOI).
Even with the new challenges, such as the Ukraine crisis, Emporion’s structured and quality-oriented approach remains unchanged.
A comprehensible acquisition rationale and an above-average closing rate are characteristics of Emporion’s successful approach

Drafting the sales contract and Emporion’s contribution

The contracts in M&A transactions are extremely complex and often run to over 100 pages.
Emporion contributes in particular the commercial provisions and the agreed level of safeguards such as guarantees and indemnities.
Emporion’s experience in supporting a large number of contracts enables it to find pragmatic solutions in the interests of the client.

Internal monitoring of the purchasing process

The internal support of the purchase process depends on how intensively the client has implemented the topic of M&A in its corporate organization.
Emporion takes over the coordination of all departments involved in the review.
From logistics and procurement to HR, a smooth process is guaranteed.

“Part of the due diligence is usually not only the risk assessment, but also the assessment of options and opportunities for integration.
This is where an external perspective is particularly valuable.”

Post-merger integration

However, Emporion’s involvement does not end with the signing.
The knowledge gained about the target company during the months is particularly valuable and continues to be used in the post-merger integration.
We are therefore happy to support our clients with the integration of the acquired company after completion.
In this way, we help to realize synergies, harmonize processes and bridge cultural differences

Conclusion

The last few meters before closing an M&A transaction are crucial.
Structured and comprehensive due diligence, coupled with experienced project management and a pragmatic approach to contract negotiations, are the keys to successful deals.
Emporion demonstrates its expertise in this complex area of management consulting with a 100% closing rate after LOI and sustained post-merger support.