Page 15 - SONEPAR 2021 - AcquisitionBook

PHASE 1:
STRATEGIC ANALYSIS
2.3.1
PHASE 2:
EXPLORATORY PHASE
PHASE 3:
LETTER OF INTENT
PHASE 4:
DUE DILIGENCE
PHASE 5:
SALE & PURCHASE AGREEMENT
PHASE 6:
CLOSING
PHASE 7:
INTEGRATION & FOLLOW-UP
ACCESS TO INFORMATION MEMORANDUM
Prepare a BUSINESS CASE and an ACQUISITION SHEET
In case of acquisition processes through brokers, the solicited purchasers will usually receive an INFORMATION MEMORANDUM providing key information about the target company.
In the other case, the internal INFORMATION MEMORANDUM template (Appendix 4) provides a comprehensive list of information
2.3.2 IDENTIFY EXPECTED SYNERGIES
The Project team must keep in mind that synergies are the actual and only justification for paying a GOODWILL.
4 different types of potential synergies shall be considered:
➜ Management:
• management expertise and know-how,
• management combination,
• fit with SONEPAR culture;
➜ Operations:
• customers’ combination,
• combined position vs key suppliers,
• sales teams combination,
2.3.3 PREPARE THE BUSINESS CASE
to be obtained on the target company. The main information required is highlighted in red.
Information that you cannot obtain at this stage will be completed
during the DUE DILIGENCE phase, if an agreement has been reached 2 with the seller through the signature of a LOI (see section 4).
• product range combination,
• back office combination,
• benchmarking on suppliers’ purchasing conditions, • add e-commerce capabilities;
➜ Logistics & Digital:
• expertise and combination,
• add data enrichment,
• logistics and ICT expertise;
➜ Market coverage:
• branches network,
• market segments (for example industry/installers).
The BUSINESS CASE (Appendix 5) is the document that countries will present to the INVESTMENT COMMITTEE. It summarizes the key and strategic information obtained during this period and explains the rationale for the acquisition.
A first integration plan must be included therein (with a first estimation of the potential one-off costs).
2.3.4 PERFORM A FINANCIAL VALUATION
The ultimate objective of the valuation exercise is to define a price for the target and to understand the impact on the profitability of the acquiring OPCO (and, consequently, that of the GROUP).
The ACQUISITION SHEET will help perform the valuation. It must be carefully prepared, as it will be the document (together with the BUSINESS CASE) on which the INVESTMENT COMMITTEE will base its GO or NO-GO decision.
The market value of a company will be defined by the ENTERPRISE VALUE:
This definition must be clear between the parties as the sellers will usually think in terms of price for shares and less frequently in terms of ENTERPRISE VALUE.
ENTERPRISE VALUE =
+ + +
Price paid for the total number of shares
NET FINANCIAL DEBT Provisions (if relevant) Minority interest (if relevant)
SONEPAR - ACQUISITION MANUAL - 2021 - FOR INTERNAL USE ONLY 13