Acquisitions & mergers

What is involved & what is HGA's role?

There is always more involved in a successful acquisition than most people believe. The biggest pitfall is to ignore the post deal integration planning. As soon as you start an acquisition, and at all times through the deal process, keep part of your focus on the post deal integration.

There is no such thing as a typical acquisition, however, the following are involved in every transaction to some extent, and of course some run concurrently, whilst others are dependent upon the outcome of a previous step.

Identify the market opportunity

Many deals fail as their acquisition plan is not well thought out and is too complex. Be prepared to debate the pros and cons before you start the process. Don't forget to plan all integration issues from day one!

Appoint advisers

Completing a successful acquisition whilst ensuring the day job is done to the best of your ability is a daunting task. Chose the external team carefully, by ensuring they have relevant experience, and that you get on well with them. There will be some tough times in every deal, and you will need to rely on them to make the deal happen.

Identifying targets

Clearly and concisely translate the market opportunity into characteristics that you want in your ideal target. Then using all sources, identify those businesses that match these characteristics as closely as possible. At this stage, think about the size of the deal and how you will fund it.

Contact, negotiate and agree Heads

Confidentially and discretely make contact with the appropriate person at the Target. Open dialogue about putting a deal together, whilst feeling out what you think about the other side to the deal. Do you trust them? What's their reputation like? Will they hit their numbers?

We lead these discussions - although it is essential to establish and reaffirm the trust between you and the Vendor. Clear, plain English terms, subject to contract, need to be agreed between the parties. This is critical. When other advisors get involved in the deal, they can refer to this upfront agreement and not get involved in renegotiating the deal.

Prepare Plan

Once Heads have been agreed, you need to request information from the other side, to complete your Business Plan and presentation to funders. We will help you do this, and we will challenge you to create a Plan that is robust, to the point and that documents what you are planning to do with the business, how you will achieve this and what you need to make it happen.

Secure Finance

You will secure the monies to complete your deal if you have a strong team, that understands your market dynamic, that can deliver differentiation, and understands the barriers to entry and the routes to market. Your projected numbers must be clear and achievable - whilst being based on well tested assumptions.

Due diligence (financial, commercial, legal and management)

Depending on the complexity, size and risk in your deal, some of the different types of due diligence will be carried out by third party professionals. This is your opportunity to check that you know what you are buying, and to give you confidence that your plan will work and that you have enough cash headroom to cover all scenarios.

Project management to completion

The deal process is a roller coaster ride, and there are significant legal, banking and commercial steps that are necessary in order to manage the deal to completion.

Manage integration process

Don't forget culture issues, IT, accounts, HR, sales, marketing, supplier base, customer base - the list is almost endless. It is the most important part of the deal - the first and last!

We will advise you on these aspects as we have both done several acquisitions - for employers and also with our own money.