Synergos Livsverk til salgs!

Transcription

1 Synergos Livsverk til salgs! Eierskiftealliansen i Oslofjorden Vest Skien Næringsråd Skien, Torsdag 0 mars, 04

2 Agenda. Synergos. Vurderinger før salg 3. Alternative kjøpere 4. Optimal salgsprosess våre erfaringer 5. Verdsettelse 6. Salgsprosessen

3 Synergos at a glance Introduction Established in Focus on sell-side M&A/partner search* 0 industry experts representing different industries ** 8 project managers with both industrial and financial experience ** All project teams are tailored to the individual project and normally includes both experienced M&A project managers and industry experts Exclusive partner in Norway for a global M&A advisory firm, Translink Corporate Finance, with a presence in 30 countries with over 00 advisers Synergos combines industrial and financial experience and knowledge *)Other services include: buy-side M&A, MBO/LBO, Joint Ventures, restructuring, strategic alliances, successions, valuation **)For buy side M&A we co-operate with Infima AS 3

4 Define sellers motives (objectives) Different motives.leads to different transaction models Sale of company Harvesting/cashing in Optimizing sales price 3 Partner for growth Revenue synergies Initiate new growth strategy Growth in Scandinavia, Northern Europe Market channels new markets Need technology, competence, Need for capital Better standing in sales and marketing activities Access to larger contracts Entering new markets Complementary products Larger sales force Expertise/know-how Increased R&D capacity 3 4 Sale of 00% Sale of majority (5-00%) Sale of minority (0-49%) Merger Cash in Lose control Some cash in Lose control Participate in further value creation Maintain control Participate in further value creation Participate in further value creation 4 Cost synergies Lower purchasing costs Lower operating costs Lower administrative costs 4

5 . Financial buyers (Might be combined solutions). Industrial partners Different seller motives leads to different buyer categories and buyer criteria (example from a real transaction) Partner categories Transaction model Partner rationale Assessment of interest A. Norwegian engineering companies Long term horizon, less concerned about short term trends Looking for 00% ownership Strengthen its own project management competence or building a new business area; project management Going into a new business area, e.g. from oil & gas to construction or visa versa B. International specialized project management service companies Long term horizon, less concerned about short term trends Looking for 00% ownership Establishing a Nordic hub Going into a new business area, e.g. from oil & gas to construction or visa versa Take company s expertise ex. Norway C. International engineering companies Long term horizon, less concerned about short term trends Looking for 00% ownership Establishing a Nordic hub Strengthen its own project management competence Establish new business area Going into a new business area, e.g. from oil & gas to construction or visa versa Take company s expertise ex. Norway D. Financial buyers/ Private Equity Will demand majority ownership or strong shareholder agreement Possible value growth by continued ownership Normally 5 7 years ownership horizon Might be a solution in phase, maybe combined with MBO Platform investment in project in project management services Combine company with other targets (initiate game plan), e.g. other players in existing segments, oil & gas, take the company ex. Nordic, etc. E. Management Buy-out (MBO) A group of shareholders acquire the company by equity/debt financing. Some shareholders may wish to divest Possible value growth by continued ownership Divest to industrial buyers in phase (3 5 years) Could be combined with a financial investor (PE) Could be a solution if not satisfactory solution with an industrial partner Increase value before divestment to industrial partners 5

6 Synergos business concept Maximizing value through a proactive partner search/sales process Strategic realised value Buyer interest and negotiation Synergy potential Strategic premium «unique synergies» Market value Stand alone value Presentation and presentation material General Synergies and value drivers Company value from cash flow «as is» Sales preparation Accounting based valuation Traditional value creation by seller/advisor Value increase through a proactive partner search/sales process 6

7 Sales process - key learnings Overview 5 Optimise SPA and price Final price squeeze Negotiation Optimise Sale & Purchase Agreement (SPA) Closing Good preparations Understand owners and company strategy Define objectives and establish partner search/sales strategy Define buyer categories Run buyer search define long list Synergos Key Deliverances 4 Evaluate buyers; industrial fit, EV, transaction model, cultural fit, reputation, etc. Select motivated, strategic and financial sound buyers Selection of buyers & due diligence Co-ordinate due diligence 3 M&A expertise Industry expertise Industry knowledge Worldwide presence Worldwide M&A presence Optimising the bidding process Proactive marketing process Define Key Investment Attractions («KIA») Establish marketing material (focus on future, not history) Management presentation Approach buyers short list The best buyers has not planned to buy Define optimal bidding process focus on optimising competition Define buyer motives, synergies and strategic rationale 7

8 Case study M7 Offshore Buyer groups rationale Process Outcome preferred buyer Citec Oy 5 Optimise SPA and price Good preparations Long list 300 targets 5 countries Get Norwegian engineering hub Strengthen topside engineering competence, especially in floating production 3 Enter the upstream oil & gas market 4 Selection of buyers & due diligence Proactive marketing process 30-40% higher price than expected Foreign buyers bids significantly higher than Norwegian buyers bids 3 buyers in due diligence 3 Optimising the bidding process 0 management meetings February 03 bids from 8 countries Norway, Denmark, Finland, Sweden, Belgium, China, UK, US September 03 Contacting buyers Marketing Mgmt presentation Indicative bids Evaluation of bidders Due diligence SPA signing Closing 8

9 3 main alternative process structures Choosing between the possible process structure alternatives is mainly a tradeoff between value maximization, speed and confidentiality However, there are opportunities to combine the best components of process structures (e.g. starting with one-to-one negotiations and moving to auction if the most potential acquirers are not interest in the acquisition opportunity) Focused auction (0-0 targets) Number of the most potential acquirers are already defined by Synergos and Translink and through previous divestment processes Process schedule is controlled by us Process time can be limited Process One-to-One Negotiations Focused auction 0 0 targets Structured auction > 30 targets Competition Speed Confidentiality Pros & Cons Freedom of choosing preferred partner High degree of confidentiality Lack of competition improving negotiation situation Process schedule may depend on potential acquirer Increased value via larger number of bidders Synergy potential with strategic bidders Seller in control of the process schedule Requires management to participate the process more than one-to-one situation (e.g. management presentations) Maximized value via large number of bidders Synergy potential with strategic bidders May delay transaction due to difficulties keeping all the bidders in the process Requires management to participate the process Confidentiality is challenging 9

10 Valuation methods Valuation methodology Method Description Pros / Cons DCF Fundamental valuation of the company s projected financial performance Values the future stream of cash flow to all investors Yields the fundamental value of Metier Used to assess/ sanity check of the valuation Requires detailed forecasts for a 0-year period Highly sensitive to changes in key variables, e.g. WACC, terminal growth and margins Peer trading multiples Comparison of key financials for the company with the implied valuation for listed comparable companies The most relevant valuation multiples are selected and subsequently applied on the company Provides an indication of the stock market valuation of Metier Used by investors considering participating in the IPO A perfectly comparable listed company does not exist for Metier in the Nordic market M&A transaction multiples Compares the implied valuations paid in M&A transactions to key financials for the company Implied value of the company based on valuations in precedent transactions in relevant industries and geographies M&A transaction prices may include strategic premiums and synergies A perfectly comparable transaction rarely exists and comparison might be hampered due to data availability and differences in e.g. market conditions Accounting based valuation Sales preparation Presentation and presentation material Market value Stand alone value General Synergies and value drivers Strategic premium unique synergies DCF Synergy potential Other relevant valuation methodologies may include Net Asset Value ( NAV ), liquidation value, book value of equity etc. Buyer interest and negotiation Peer trading multiples and M&A transaction multiples valuing the company on a stand alone basis A DCF valuation will give a better indication of the company s true value as it includes potential synergies and other unique factors that may have relevance for the buyers To do a proper DCF valuation you need a detailed input on key financials (i.e. adjusted financial figures, working capital, capital expenditures, projections on revenue growth and EBITDA margins) 0

11 Process overview and key activities Overview Month Month Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Evaluation/ preparation Marketing Buyers due diligence Negotiation/ execution Clarify objectives and business understanding Define preferred strategy Prepare marketing materials Identify potential acquires (long list) Valuation estimate Contact potential acquirers and distribute marketing materials Management presentation Analysis of potential buyers/partners Prepare process letter and obtain indicative bids Prepare due diligence materials to virtual data room Due diligence Management presentation/«site visits» Distribute draft SPA Final offer Negotiation: SPA and purchase price Acceptance from authorities (competition authorities) Closing Key activities Objectives and strategy Documentation Legal issues Valuation Due diligence Target buyers Project management Tactics Approvals on documents Decision on buyers Go-no-go decisions Timing Information memorandum Process letter Teaser Presentation for key industrial (strategic) buyers Mgmt presentation NDA SPA Negotiations Potentially LOI Anti-trust filing M&A closing procedures Valuation estimate updates Financial, legal and commercial Data room (electronic and physical, set up and management) Site visits Meetings with buyers Identify buyers Contact buyers Presentations for key industrial (strategic) buyers Follow up questions Project management Project co-ordination

12 Contact details Overview Leif Larsen Partner E-post: Mobil: Synergos AS Lysaker Torg 8 P. O. Box Lysaker, Norway Org. no.: