Assignment
A Swiss industrial group with international production and sales had targeted for acquisition a privately held German company. The industrial group’s CFO asked Schreiber Finanz to provide financial analysis to support their management team in the three stages of the acquisition process – valuation, term sheet and due diligence, and integration.
Challenge
To complete the deal, the industrial group needed a detailed business plan for the acquisition target that quantified synergies on the sales and the cost side. They also needed to define a span for the purchase price and due diligence to confirm whether the information and assumptions underlying the business plan were correct.
Solution
As part of the business plan, Schreiber Finanz modeled a financial plan for the next five years (including P&L, balance sheet, and cash flow statement). From this, Schreiber Finanz derived a valuation and recommended a span for the purchase price to be negotiated. In the term sheet, we defined how the purchase price depended on certain key figures both on the closing date and during the two years to follow. In due diligence, we verified the financial information the seller provided and determined the exact figures on which the purchase price was determined.
Results
Using Schreiber Finanz’s work, the client successfully negotiated a realistic purchase price that was contingent on certain conditions, guaranteeing for instance a minimum equity as per closing date and making part of the purchase price dependent on the results (e.g., EBIT and order intake) of the two years following the transaction. Immediately after the acquisition, Schreiber Finanz founder Christian Schreiber helped the newly acquired company’s finance department implement the reporting procedures required by the group’s headquarters in Switzerland.