Private Equity Deals
Private equity funds are organizations that take equity stakes in promising firms with a view to creating value. Ultimately their goal is to realize a capital gain on their investment after exiting in the short to medium term. Private equity firms can provide start-up funding, expansion capital, turnaround capital and mezzanine finance.
As a sell-side advisor (supporting the target company), we work very closely with the firm’s owners and managers to produce an information memorandum that reviews the target company’s history, current situation, management expertise, expansion plans, future projections, financing requirements, and the risks facing the business. Most importantly we provide a fair valuation built on solid highly detailed analysis firmly rooted in reality. Often our studies can unlock hidden value and provide useful insights that can be applied to improve the way in which the business operates. We then tap our network of relationships with local and regional private equity houses to identify the most suitable partner and, in conjunction with the owners’ legal advisors, oversee the negotiation process up to financial close.
As a buy-side advisor, we can aid private equity firms by originating deals that match their
investment criteria. We can identify the key metrics that drive the target business’s growth thus enabling them to focus, post-deal, on the issues that matter most. Our input during the structuring phase can add value by applying various reward mechanisms that ensure that the target company’s management is incentivised and committed to achieving the private equity firm’s goals.
One of our key concerns when advising on private equity transactions is to understand the needs and views of all parties and devise solutions that align their interests. We work to tailor deal structures that can withstand post-deal business pressures and ultimately result in a successful partnership. Innovative instruments such as ratchets, sweat equity, earn outs, and equity kickers among others can all be considered and engineered into the transaction to overcome differences over valuation and future expectations thus allowing the deal to be executed.