25/11/2016
ABES team of speakers and directors
Effective recommendations for mergers and acquisitions
Brazil is at the end of a negative economic cycle, but not even the crisis prevented the flow of foreign investments to the country, coming from companies or funds. In view of this scenario, which points to the resumption of economic growth, ABES promoted a meeting with its members with the theme “How to acquire or sell a business? Mergers and acquisitions: recommendations and tips from different angles ”, on November 24, in São Paulo.
Lincoln International partner and CEO Brazil, James Sinclair, believes that the mergers and acquisitions processes in the national market will grow again in 2017. Worldwide reference in this sector, Lincoln is one of the few investment banks focused on small or medium companies postage.
Data from KPMG and PWC show that the information technology sector has led the ranking of mergers and acquisitions in the country and that small and medium-sized transactions accounted for 73% of the total transactions disclosed in 2015. respectively. Sinclair recalls, however, that the lack of preparation of entrepreneurs can negatively affect the company's value.
"Negotiating prices is not everything", this is the statement of the director of Lincoln International, Roberto Aldworth, pointing out that there are differences in the conduct of negotiations with funds, which have a date to go out of business, or with another company. "The average time of the process is 8 months of work, from the preparation, passing to the contact with the investors, the receipt of the proposals until the closing", explained the executive.
He noted that there are four sales process options: dedicated (contacts with only one possible buyer); selected target (choice of more investors focused on the sector); controlled auction (contact with a broader group of strategic and financial investors); and large auction (a much larger group of investors). “It is important to understand what the buyer is looking for in the acquisition of a company, business unit or equity interest. The interest may be directed to the conquest of market share, of technology, of the portfolio of brands and products, of intellectual capital, among other factors ".
How to guarantee the value of the company
THE due diligence, which involves all the gathering and auditing of information about the company for sale, can be carried out even before starting any contact with a potential buyer. “In this sense, it is a way to avoid possible problems that hamper the negotiations in progress or affect the value of the transaction, as all accounting, financial, legal, tax, tax, social security, marketing and environmental aspects are verified, in order to to identify and correct the incosistences ", evaluated Octavio Zampirollo, partner of Grant Thornton, an auditing company. According to the executive, negotiations involving small and medium-sized companies bring the advantage that managers usually present a great knowledge of the market in which the companies are included, but, on the other hand, the auditors and consultants need to deal with the intense emotional involvement of the partners, as many of them are family companies.
The lawyer and partner at Trench, Rossi and Watanabe Advogados, Alberto Mori, emphasizes that it is better to know the weaknesses and problems of the company that will be sold before opening the doors to potential buyers, and the lawyer has the role of promoting a legal audit of contracts, propose preparatory measures, such as adjustments to the corporate structure, verify the need for government authorization for the transaction, prepare declarations and letter of intent, among other activities, including all the mapping of the legal issues involved with possible liabilities - tax, labor, social security, etc. - including assessing the existence of jurisprudence in matters of legal risk.
The lawyer and partner at Trench, Rossi and Watanabe Advogados, Flávia Rebello Pereira, recalls that in matters of intellectual property, the audit will identify how are the registrations of trademarks and patents in Brazil and in other countries, if the company has an international presence; identify copyright issues with employees working on program development; evaluate the contracts, if the company is a distributor, among other points "Even the use of free software in the source code of proprietary software needs to be evidenced and can affect the value of the transaction", he says.
“It was excellent content, very relevant today. These presentations bring value to ABES associates ”, commented Niteo Informática's COO, Josmar Machado. “It is very important to know the subject, especially given the growth of technology companies. Even if we do not have the immediate objective of selling or buying, I consider it essential to know the steps of the process and understand how we should behave, if one day an offer appears ”, completed the partner and director of Ifractal, Marcelo Germano de Oliveira.
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