Acquiring With Insight and Wisdom
An estimated 65% of all acquisitions fail. It’s a sobering statistic. The buyers undoubtedly conducted extensive due diligence. Why, then, were they surprised later by substantial shortfalls in projected revenue, customer base erosion, earnings dilution, product integration nightmares, or the rapid departure of key management? Most often, it’s because the buyers didn’t truly understand critical elements of the seller’s business, or anticipate the post-closing impact of the acquisition. Acquisition success requires an intimate knowledge of private company operations, finances, product strategy, distribution channels and market strategy. That’s our bread and butter. We help buyers choose wisely, assess astutely, value intelligently and structure transactions that can better the odds and the outcome. It’s this unique combination of investment banking skill and unmatched industry expertise that distinguishes Third Eye Group from other firms.
- Our firm is well-known and highly respected
- We have profound knowledge and understanding of the mining industry and familiarity with localization of the project, we serve with care.
- Third Eye Group has guided, mentored and represented several companies, including both buyers and sellers.
- We are strongly committed to success and enjoy an impeccable reputation for integrity and professionalism.
Strategic Acquisitions to Grow Revenue, Expand Markets and Enhance Shareholder Value
Third Eye Group’s primary buy-side objective is to facilitate transactions that satisfy the anticipated returns on investment of our clients. By utilizing our extraordinary industry network and employing a proven buy-side methodology, we help our clients acquire strategically, assess insight-fully, value intelligently and structure transactions to better assure the desired outcome.
Our Comprehensive Buy-Side Process
Our approach to buy-side mergers and acquisitions is comprehensive, hands-on, and results-driven. Though the actual process may vary, here’s a step-by-step overview of our typical approach:
Formulate and Clarify Acquisition Strategy. We begin with extensive fact gathering and a detailed strategy session. Our objective is to define and clarify with client senior management its specific acquisition goals and objectives, including the desired return on investment.
Formulate Acquisition Parameters. While most acquirers are certain they know what they’re looking for, few consider the plethora of collateral issues that cause so many acquisitions to fail. The technologies should be compatible.
Create/Assemble Briefing Memorandum. Initial impressions are important, and presenting an acquisition opportunity to a target seller is no exception. We understand, intimately, the mind set of private company, entrepreneurs/principal shareholders. Many are receiving numerous inquiries about their acquisition receptivity. To effectively stimulate target seller interest, we typically prepare a Briefing Memorandum that provides a compelling overview of our client, its finances and relevant valuation measures (if publicly reported), products, target market and market opportunity, as well as the Client’s acquisition objectives and parameters. Our objective is to carefully and strategically position our client as an ideal merger partner with size and synergies that could significantly leverage the target seller and enable it to reach its true potential.
Identify Acquisition Companies and leverage client’s market knowledge and industry contacts to leave no viable prospect unidentified. The resulting product is a solid list of qualified acquisition companies.
TEA contacts priority companies, present the opportunity, and assess initial interest. If the company is willing to engage at this juncture, we’ll request relevant financial performance data, suggest an introductory phone call or meeting with our client, and arrange for the exchange of a mutual Confidential Information Agreement.
We coordinate the initial meeting or teleconference with each company, set the agenda in concert with our client, and actively proceed. This first meeting is a vital element of the process. Having guided and represented many sell-side, we can provide our buy-side clients with a unique opportunity and profound insight.
Negotiate Purchase Price and Letter of Intent
After consulting closely with our client, we lead negotiations with the target company, focusing initially on purchase price, form of transaction, form of consideration, payment terms and deal structure. We believe it‘s in the best interests of our client to address key deal terms and known issues at this juncture, rather than defer discussion until much later in the process. These key elements are then memorialized in a reasonably detailed, non-binding letter of intent we typically help draft in concert with our client.
Due Diligence Coordination
In the current regulatory environment, today’s buyers – particularly public company acquirers – require a detailed, thorough examination of the seller’s business, finances, assets and records to confirm their perceptions of the seller’s value and identify and quantify any seller-related risks. The process can also aid post-closing integration by illuminating areas that may require special buyer attention. TEA helps facilitate the due diligence process communicating frequently with the client’s attorneys and accountants to help clarify and resolve issues as they arise.
Contract Drafting Facilitation
During the drafting and negotiation of the definitive agreements, communication often breaks down, emotions surge and crises frequently arise. Our extensive sell-side experience enables us to be especially adept at anticipating, addressing and resolving seller related issues that could needlessly imperil a transaction. We pay particular attention to the timing and structure of closing payments. When opposing dig in, we’re usually able to shed light, clarify concerns and bridge differences over such issues as the nature and scope of representations and warranties.
The Time Line
The period from initial engagement to closing can vary from several weeks to many months, depending upon the specifics of the assignment and the nature and scope of work. It ordinarily takes from three to four months from the inception of the process until the signing of definitive agreements and closing.
The Bottom Line
Acquisition is essential today for companies seeking accelerated growth, new markets, greater market share and competitive differentiation. The process is complex, multifaceted and extraordinarily demanding. Successful acquisitions require a diverse and highly specialized skill set combining strategic thinking, tactical execution, profound industry expertise, investment banking sophistication, interpersonal finesse and negotiation mastery. That’s why investors come to Third Eye Group.