Mergers and acquisitions (M&A) is a general term that refers to the sale of a company or consolidation of two companies; typically generating meaningful upfront liquidity for the selling business owner. Through a variety of tax-driven structures, these transactions may include asset sales, stock sales, IRC 338(h)(10) or IRC 368(a)(1)(F) as the most common structures employed.
Sell-Side M&A
Traditional Mergers & Acquisitions (M&A)
Buyer’s may be either strategic companies within a related industry, a financial buyer looking to acquire a platform investment in the segment, or a new or existing management team looking to acquire the business from the Sellers.
Depending upon a Seller’s personal objectives, an M&A transaction may result in the sale of 100% of the ownership, a majority sale, or a minority sale. Establishing a deep understanding of the Seller’s objectives is critical to selecting an optimal transaction structure and potentially a desired ongoing equity interest.
Ambrose is a trusted provider in M&A transactions representing Sellers, Buyers and management teams.
- Transaction structure designed to create liquidity for shareholders in the most tax-efficient manner possible
- Ownership transition plans established up-front between Buyer and Seller
- Upfront cash typically higher than other liquidity options
- All proceeds except for escrowed amounts normally paid at close
- Detailed non-disclosure agreements executed between Buyer and Seller to minimize risk of employees, suppliers or customers learning of a transaction prior to close
- Financial buyers typically pose less of a competitive threat to a Seller during the due diligence process while strategic buyers are allowed access to highly sensitive due diligence information late in the process
- Financial buyers typically provide better continuity for the existing corporate culture and retain the owners’ legacy
- Well-capitalized Buyers can execute a strategic growth plan to create industry consolidation and leverage economies of scale or invest in organic growth programs in order to capitalize on market potential
- Financial buyers may offer key managers co-investment rights up-front on a pari passu basis alongside their equity
- Financial and strategic buyers typically create a management incentive plan or options pool for senior management to create a win-win partnership and ensure employee retention
- Ongoing roles for key individuals may be negotiated up-front depending upon the synergies with the strategic buyer
- Many strategic buyers have more generous employee benefits plans for employees than most privately-held companies
Coordinated Team of Professionals Ambrose M&A Advisory Approach
M&A transactions require a coordinated team of professionals including an investment banker like AmbroseAdvisors, the Seller’s CPA, Seller’s legal counsel, Seller’s wealth manager, insurance providers, Buyer’s CPA, Buyer’s legal counsel and third-party lenders to the extent outside financing is required. Ambrose coordinates its efforts with all constituents to ensure a smooth M&A transaction.
Investment Banking
Valuation analysis, deal marketing, projection modeling, synergy analysis, transaction structuring, soliciting proposals, negotiations, leading the transaction execution, resolving open issues, reviewing all documentation, transaction schedule coordinating, funding and closing.
Transactional Support
Managing due diligence, transaction negotiations, build-out an e-data room, assistance with the selection of legal counsel, and selection of transaction insurance.
