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M&A BASICS

In the following area, NOMAS provides expertise on the subject of M&A.

 

A typical transaction process and M&A dictionary should create transparency.

Sample Sell-Side Process

The process of selling company can be divided into four phases:

 

01/

Preparation Phase

At the beginning of the sales process, the interests of the shareholders are coordinated in order to jointly define a targeted approach. We analyze your initial situation with our unique NOMAS tools. After creating an evaluation corridor, we develop an individual investment story.

On this basis, the NOMAS team creates the sales documents in form of an information memorandum, which contains a detailed presentation of your company, and a teaser for anonymous investor approach. The potential buyers are identified and analyzed with the help of our international network as well as the NOMAS tools and the NOMAS databases.

 

03/

Presentation & Due Diligence Phase

In the management presentation your company will be presented, a site visit will take place and specific questions will be clarified. There is also an initial exchange about potential framework conditions and strategic development potential. The acquirers are then required to submit a Letter of Intent (LOI) confirming the indicative offer. After a detailed analysis and internal coordination, it is determined which acquirers will be admitted to the due diligence.

02/

Approach Phase

The selection of buyers is presented as a short and long list and coordinated with you. With the teaser, NOMAS addresses the potential acquirer and, if interested, concludes a confidentiality agreement (NDA). The information memorandum is now made available on this basis. As soon as the investor decides to participate in the further process, we ask him to submit an indicative offer (non-binding offer). After analyzing the indicative offers, a group of investors with whom one goes to the management presentations is determined.

 

 

04/

Negotiation & Final Phase

Once the due diligence has been successfully completed, a binding offer is submitted by the acquisitioners. After checking and weighing the different offers, the final buyer is determined. The sales contract is then drawn up. After final and exclusive negotiations with the buyer, the purchase contract is signed and notarized (signing). With the occurrence of all agreed conditions, the transfer of ownership (closing) is completed by the notary. NOMAS is still available to you after the successful transaction to guarantee a smooth transition process.

"Transparency and knowledge form the basis for a successful cooperation"

Andreas Schwegler, Managing Partner

M&A Dictionary
Binding Offer

 

 

 

Binding Offer

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The binding offer is a binding offer from a prospective buyer.

Buy and Build 

 

Buy and Build 

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Buy and Build is a growth strategy in which companies with complementary or complementary business models are acquired in order to consolidate fragmented markets and thereby exploit economies of scale and competitive advantages.

Buy Side

 

 

 

Buy Side 

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The side which wants to purchase a company is called buy side.

Carve Out 

 

 

Carve Out

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In the M&A business, the term carve out means that a company sells or splits off individual business areas or parts of the company.

Closing Actions 

Closing Actions

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The closing actions are actions that are carried out through the execution of the purchase contract (payment of the purchase price, for example)

Corporate Finance

Corporate Finance

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 Corporate finance includes a number of sophisticated corporate finance instruments and the directly related or independent advisory services provided by credit institutions.

Discounted cash flow method

 

Discounted cash flow method

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The discounted cash flow method is used to determine the value of a company. A company's free cash flow is discounted using a corresponding interest rate. In addition, a distinction is made between the gross and the net method in the discounted cash flow method.

Due Diligence

 

Due Diligence 

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Due diligence plays an important role in an M&A transaction. During due diligence, companies or individuals are thoroughly analyzed for economic, tax, financial and legal aspects.

Family Office

 

Family Office 

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A family office is the management of the private assets of one or more families. Often, the capital is used to invest in companies.

Information Memorandum (IM)

Information memorandum

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The IM is a written draft that contains all of the company's important information and is created as part of an M&A transaction and made available to other companies or investors. As it contains confidential information, it will only be sent to interested parties or investors after the Non Disclosure Agreement  and the Letter of Intents have been signed.

NBO

 

 

Non-binding offer

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The NBO is an initial non-binding offer that confirms interest in acquiring the company at a certain price.

LBI

 

Leveraged buy-in 

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A leveraged buy-in occurs when an external management takes over a company and the takeover was mainly financed by outside capital.

LBO

 

 

Leveraged buy-out 

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A leveraged buyout is the predominantly debt-financed takeover of a company.

LOI

Letter of Intent

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The Letter of Intent is a non-binding declaration of intent between contractual partners, which provides information that the partners are in contractual negotiations. No legal claims can be derived from the letter of intent.

Long List / Short List 

Long List
Short List

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Selection of possible investors for a company purchase or sale.

M & A

Mergers & Acquisitions 

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M&A refers to all processes and steps that arise when buying or selling companies or company shares. In addition, M&A deals with topics such as the financing of company acquisitions, the establishment of joint ventures and the acquisition of companies.

MBI

 

 

Management buy-in 

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At an MBI, a company is taken over by an external management.

MBO

 

 

Management buyout 

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A management buyout is the takeover of a company by its own management.

Multiples

 

Multiples

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Multiples are often used to evaluate a company. With this method, the value of a company is determined by multiplying certain key figures (e.g. EBITDA, EBIT, sales) by a special factor.

NDA

 

Non Disclosure Agreement

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A Non Disclosure Agreement is an agreement between different parties about the obligation of confidentiality of all written and oral information relating to a specific project or company.

Private Equity

 

 

Private equity

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Private equity that is used to invest in OTC companies.

Process Letter

Process Letter

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The process letter is usually created by the M&A consultant and is sent to the prospective buyer. It usually contains the conditions for potential buyers and includes the procedural steps of the transaction process.

Sell Side

 

 

 

 

Sell Side

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The side which wants to sell its company is called the sell side.

Signing/Closing

 

Signing 
Closing 

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When the respective parties sign the purchase / sale contract in an M&A transaction, this is known as signing. However, the transaction will only be concluded once all the necessary and possibly suspensive conditions have been met. This is then called closing.

Spin Off

 

 

 

Spin off 

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A spin-off is the outsourcing of a business unit to an independent company.

Teaser

Teaser 

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The investment teaser is a short, anonymous document that draws the attention of potential buyers to the sale / purchase of a particular company and contains the most important information about the company. The teaser is the first approach to potential buyers / sellers and no confidentiality declaration is required.

Venture Capital

 

Venture capital

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Venture capital is capital that is made available to young and usually innovative companies. This form of participation involves high risk for investors, but also high growth opportunities.