overview of our transaction services · 2018-09-16 · overview of our transaction services 04 how...

OVERVIEW OF OUR TRANSACTION SERVICES

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What is a Transaction? 03

Acquisition 04

Funding 06

Exit 08

Stages of Funding 10

Our Experience 11

Pricing and Terms 12

Contact 13

STAGES OF FUNDINGWHAT IS A TRANSACTION? OUR EXPERIENCE PRICING & TERMS CONTACTACQUISITION FUNDING EXIT

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What is a Transaction?M&A, buyouts, LBO’s, MBO’s, private equity, venture capital, Series A, seed capital,

and myriad other terms are used to describe transactions that fundamentally

change the nature or course, and control, of a company. While there are many

differences among these types of deals, a common thread runs through all of

them. They are all strategic transactions that involve a change or shift in control

of a company and usually a corresponding shift in strategic direction.

Strategic transactions are seismic life-changing events that fundamentally alter a

company. They usually change not only who controls the company but also the

strategic direction the business will take. They sometimes take a private company

public, or vice versa, or make an independent company into a small subsidiary.

While full acquisitions are the most common strategic transaction, there are many

variations on the theme. However, all strategic transactions have a lot in common.

They all involve a substantial or total change in control and a large amount of

money changing hands.

They all involve buyers, who will want to learn a tremendous amount about the

business and understand it deeply. Finally, they all involve a seller, who is trying

to maximise the value of the business but also has other interests, including the

long-term partnership it may be entering into with the buyer and the fate not only

of its business but also of its employees.


We advise and support clients during pivotal transactions

crucial to their business, including:

Building value through asset

acquisitions to create new cash flows

Fuelling growth by arranging debt and

equity funding

Creating liquidity for shareholders

through an exit, trade sale or listing

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How We Work: AcquisitionGiven the combination of complexity and importance inherent in a strategic

transaction, such as an acquisition or a divestiture, it is well worth the investment

to develop the right capabilities and team to execute the deal well and efficiently.

Whether you are a buyer or a seller, developing the right capability to execute a

deal can not only ensure that the deal goes smoothly but also actually adds the

value it was intended to generate.

Saki Partners will assist you by pulling together the right team of advisers to

complement your existing management team and tailoring a process designed to

efficiently and successfully execute the transaction and deliver you results.


Buyer Seller

Deal

Process

Due

Diligence

Integration

Planning

Financing

Issues

Closing

the Deal

Valuation

The key stages in our process are typically:

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Integration Planning

• Linking due diligence to integration planning and

execution

• Developing strategies for integration issues, e.g. people,

technology, products, operations, brand, customers,

suppliers, etc.

Integration

Planning

Deal Process

• Determining the universe of acquirers (buyers in a

divestiture) or acquirees (targets in an acquisition)

• Making the approaches

• One-on-one negotiations

Due Diligence

• Building an internal team

• Identifying regulatory and compliance issues

• Understanding what the buyer needs to know

• Creation and maintenance of a data room

Financing Issues

• Cost of capital and sources of funds

• Raising capital as either debt and/or equity

• Paying in shares and earn-out arrangements

Valuation

• Identifying transaction comparables

• Discounted cash flow and financial modelling

• Relative valuations and internal metrics

• Understanding buyer and seller perspectives on valuation

• Identifying and quantifying synergies

Closing the Deal

• Planning media and industry announcements

• Creation of a transaction bible

• Finalisation of contracts and deliverables

• Evidencing the completion milestone


Buyers Preparation (Acquisition Only)

• Alignment to broader corporate strategy

• Board and management buy-in

• Building internal capability and selection of external

advisers

• Devising a process for identifying potential targets

• Planning the message and stakeholder communications

Sellers Preparation (Divestiture Only)

• Cleaning up the business or asset to make it more

saleable

• Setting expectations with stakeholders

• Identifying issues and strategies relating to employees,

technologies and processes

Buyer Seller

Deal

Process

Due

Diligence

Valuation

Financing

Issues

Closing

the Deal

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How We Work: FundingThroughout the life-cycle of every business, owners and managers will confront

critical milestones where external funding is required. Commencing with the initial

capital to fund its start-up, many businesses will require further external funding

to drive expansion and customer penetration. The timing of these milestones and

amount of funding required will vary with each business given unique factors

such as the capital intensity of the sector, the competition intensity of the market,

the unique business model and the company’s growth plans and expansion

strategies.

Saki Partners will assist you in developing and executing the most appropriate

funding strategy utilising a combination of;

• debt (such as asset financing, equipment leasing, commercial mortgage,

factoring, convertible notes, debentures) and/or,

• equity (such as ordinary shares, preference shares, hybrids, performance

rights and options).

In Australia, the Corporations Act 2001 (Cth) regulates the way a company can

make an offer of securities to investors and prescribes the types of disclosure

documents to be used (e.g. a prospectus or profile statement).

Saki Partners specialises in offers of securities that, under the requirements

of Chapter 6D of the Corporations Act, do not require disclosure to investors.

Our ‘exempt offer’ process focuses on targeting investors such as:

• Sophisticated Investors: those having net assets of at least $2.5 million or

gross income for each of the last two financial years of at least $250,000

(s. 708(8) Corporations Act), or,

• Professional Investors: a financial services licensee or having or controlling

gross assets of at least $10 million (s. 708(11) Corporations Act).


Deal Execution

Investor Approaches

Due Diligence

030201

Our exempt offer process typically involves 3 key stages:

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Stage 01: Due Diligence

Defining specifically what information the company will be sharing with potential

investors, and compiling information to support the valuation.


Deal Execution

Investor Approaches

Due Diligence

030201

Stage 02: Investor Approaches

Preparation and coordination of

presentations and other communications

to per-qualified potential investors.

Stage 03: Deal Execution

Assisting in negotiating terms

with investors and finalising the

completion of the transaction.

Potential investors typically include:

• High-net-worth individuals

• Family offices

• Regulated superannuation funds

• Financial planning groups

• Investment advisers

• Financial services licensees

• Institutional investment funds

• Private equity firms

• Stockbrokers

• Venture capital firms

• Real estate assets

• Regulatory and compliance permits

• Public relations and media

• Key management personnel

• Roles and experience of directors

• Business issues and industry trends

• Technological assets

• Customers

• Suppliers and key partners

• Details of products and services

• Accounting and tax issues

• Financial history

• Audit reports

• Accounting standards

• Financial projections

• Legal issues

• Material contracts

• Financial commitments

• Intellectual properties

• Assets and liabilities

• Ownership and share registry

• Environmental liabilities

• Valuation

• Insurance

Due diligence process typically involves collating evidence such as:

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How We Work: ExitIf choosing to acquire is like a battle, then choosing to sell is the entire war. It’s

the final decision that will close the books on the venture and the final scorecard

that will tally the success of the business. As such, the decision is usually long

fought and subject to a great deal of debate. This is as it should be. It is rare that

there is a specific point in time when it is clearly optimal to sell a company, and

so usually a judgement call must be made about likely future events including the

performance of the company, its competitors, the sector, availability of capital and

comparable valuations of industry peers.


Saki Partners will assist you in developing and executing the most appropriate exit

strategy, such as a;

• Trade Sale: where part or all of a company’s shares or assets are sold to a

strategic buyer (who intends to grow the business) or a financial buyer (who

wants to generate a financial return on their invested capital).

• IPO: an Initial Public Offering is a transaction in which the shares of the

company are listed on one or more stock exchanges and sold to institutional

and retail investors. IPO’s can be used to raise new equity and provide an

opportunity for founding shareholders and pre-IPO investors to exit.

Adviser Selection

Deal Execution

Exit Strategy

Buyer Approaches

Due Diligence

03 0502 0401

The key stages in our exit process are typically:

Stage 01: Due Diligence

Defining specifically what

information the company will be

sharing with potential buyers,

and compiling information to

support the valuation.

Stage 02: Exit Strategy

Defining the exit strategy

as a trade sale, an IPO or

combining it into a dual-track

process.

Stage 03: Adviser Selection

Appointment of legal, technical,

taxation, financial and other

advisers to support and advise

the transaction.

Stage 05: Deal Execution Assisting in negotiating terms

with buyers, including earn-out

arrangements, and finalising the

completion of the transaction.

Stage 04: Buyer Approaches Preparation and coordination

of presentations and other

communications to potential buyers

through a public tender process or

by confidential targeted approaches.

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Saki Partners assists you in tailoring a process to achieve an exit, coordinating the selection appointment of advisers, and project managing the transaction to completion.

The types of advisers typically associated with an acquisition or exit may include:


Strategic

Investors

Legal

Advisers

Auditors

Institutional

Investors

Investment

Banks

Company

Secretary

Board of

Directors

Taxation

Advisers

Patent

AttorneysUnderwriters

Retail

Investor

Networks

Geologists

& Scientific

Experts

Media & Public

Relations

Advisers

Independent

Experts

Investigating

Accountants

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Stages of FundingPre-Seed

A typical pre-seed round sees a founding team receive a small

investment to fund the achievement of one or more of the milestones

such as hiring a critical team member, obtaining a licence, or

developing a prototype product.

01 03

02 04

Typical Amount < $1 Million

Typical Company Valuation $1-3 Million

Common Investors Founders, friends and family, early-stage angels, start-up accelerators

Typical Amount > $2 Million


Common Investors Angels, early-stage VCs, start-up accelerators

Seed

Capital from a seed round often fuels a start-ups move beyond its

founding team, funds product development, and in some cases, even

facilitates early revenue generation.


Growth Capital

By this point, a start-up is expected to have clear and growing evidence

of product or service acceptance which translates into revenue growth

from new customers. The business should also be starting to show

stability in operating metrics.



Common Investors VCs, sophisticated and professional investors

Pre-IPO

Pre-IPO rounds are used to fund large-scale expansion, like moving

into a new market (commonly international expansion), or to fuel

acquisitions of other businesses and ultimately readying the business

for a liquidity event such as a trade sale or IPO.


Typical Company Valuation $50 Million

Common Investors Late-stage VCs, private equity firms, investment banks

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Our ExperienceSaki Partners has advised clients over a broad spectrum of sectors including; manufacturing, mining, entertainment, technology, financial services, agriculture,

not-for-profit, higher education, sovereign governments, and emerging markets.

Here are a few examples of the range of transactions that forms part of our experience:

Strategic investment strategy

USD $10B

Vertical integration of supply

chain $6M

Acquisition of US-based Mach7

Technologies $60M

Convertible note issue of $2M

Cross border asset sale $3.6M

Sophisticated investor placement

$3.3M

Debt syndication of $13MGrowth funding for

start-up $5MTrade sale to listed

competitor $20M

Asset financing agreement $4M

Seed capital for start-up $1M

Entitlement offer $20M

Institutional placement $2.5M

Initial Public Offer $25M

Advising on sovereign bond issue

USD $1.5B

KUWAIT INVESTMENT AUTHORITY

CONFIDENTIAL

3D MEDICAL KNEOMEDIA

ANIMOCA BRANDS

ANIMOCA BRANDS

CRK PROPERTIES

CONFIDENTIAL CONFIDENTIAL

CONFIDENTIAL

CONFIDENTIAL

SKYDIVE THE BEACH

MACH7 TECHNOLOGIES

SKYDIVE THE BEACH

GOVERNMENT OF MONGOLIA

GOVERNMENT

M&A DEBT FUNDING EQUITY FUNDING EXIT, TRADE SALE, IPO

PRIVATE

LISTED


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Pricing & TermsSaki Partners works with business owners and senior executives on sensitive

strategic and financial issues.

It goes without saying that many business decisions need to be handled with

discretion. We will treat your dealings with the utmost sensitivity and guarantee

that they always remain strictly confidential.

We can work on a project-to-project basis, as fixed term consultants or join your

company and become ‘part of the family’ through a directorship or nominee role.

Our appointment is on an exclusive basis and we will pull together a team of other

experts and advisers to assist you as required.

Our fees vary depending upon the scale and complexity of each transaction and

generally comprises both a fixed retainer and a success-based component.

Fixed Retainer: A fixed project management retainer throughout the

duration of the transaction

Success-Based Fee: In the range of 6% to 8% of equity capital raised

In the range of 1% to 2% of debt funding raised

In the range of 2% to 4% of value for an M&A or exit

Tax and Legal Advice DisclaimerSaki Partners (and its directors, officers, employees and affiliates) do not provide tax, legal or

accounting advice. Any material provided to you is prepared for informational purposes only, and is

not intended to provide, and should not be relied on for tax, legal or accounting advice. You should

consult your own tax, legal and accounting advisers before engaging in any transaction.


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ContactCONTACT SAKI PARTNERS

Saki Partners (Services) Pty Ltd

ABN 60 618 836 892

Suite 2702, 18 Park Lane

CHIPPENDALE NSW 2008 AUSTRALIA

Telephone: +61 2 8011 0422

Email: [email protected]

Web: www.sakipartners.com.au


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ABOUT CHIPPENDALE

Saki Partners is located adjacent to Sydney’s CBD in Chippendale – a place of creativity, cutting-edge architecture and cool cafes. More recently, Chippendale

has become known as one of the key creative arts districts of Sydney and is host to many creative events each year.

Chippendale is centrally located within Sydney’s higher education research precinct and is bordered by The University of Technology, the University of Sydney,

The University of Notre Dame Australia, Australian Technology Park Sydney as well as the Sydney campuses of Curtin University and The Boston University.

REFERENCES

Berk J., De Marzo P., Harford J., Ford G., & Finch N., (2010), Fundamentals of Corporate Finance, Pearson Education, Sydney

Carlin T. M., Finch N. & Ford G., (2007), Mergers and Acquisitions: Current Issues, Palgrave McMillan, New York

Frankel M., (2005), Mergers and Acquisitions Basics, John Wiley & Sons, New York

overview of our transaction services · 2018-09-16 · overview of our transaction services 04 how...

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