How can a CFO help you prepare for mergers and acquisitions

The M&A process deals with marketing the company to its prospective buyers based on its value. This is why it is important to prepare for M&A in advance to achieve positive results.

A large number of SME owners are likely to exit the business anytime in future after they realise that the expected value of their organisation is related to the process of preparing for that instance. The M&A process is all about marketing a company to its potential buyers. This incorporates both financial benefits and those related to that specific sector.

Although some entrepreneurs plan business strategies in advance, some potential buyers can approach a company anytime and if the owners are prepared, it can have an adverse effect on the price of the business.

Start early

Be prepared in advance. Get the due diligence done and make sure that your business is prepared to go through the transaction. If not, your company would have to assemble and prepare a large amount of data in less time. If the elements of the data are mismatched, this will weaken the confidence of buyers and have an impact on the price.

Help of a professional Chief Financial Officer who holds experience in M&A transactions can be beneficial for a business to achieve optimum price. Such professionals act as point of contact for the buyers and answer all of their potential questions, managing everything diligently. Besides, they handle contract negotiations and closure processes.

Price drivers – a forecast

Business forecast is the key element driving its price. The forecast information should include the advantages of synergy: sales synergies facilitating cross-sales so that the new buyers can sell their products to existing customers of the company and vice versa. Product development synergies are also crucial since when two technologies fuse with each other, they can create products with great market potential.

A CFO, who is commercially aware of the process, can identify maximum possible synergies and explain how the buyers can benefit from them. He can also create a credible forecast for individuals in diverse areas of the buyer’s business. A Chief Financial Officer experienced in mergers and acquisitions can also advise the company on what support they actually need prior to entering the M&A process.

Business as usual

It is essential to continue with business as usual at the time of M&A transaction. If the company is not able to meet sales target during that period, it is seen as a risk by the buyers. Given that forecast drives the value of the company, failure to meet the targets will have an adverse effect on valuation.

At Proactive CFOS, we have built a network which includes both offshore and onshore parties to help you find target companies for business mergers Sydney. We assist you with negotiation process and funding the transaction.

May 25 2016


Planning for capital raising: Develop an effective strategy

As a business owner, it can be quite overwhelming to assess your options for capital raising. You need to rethink your game plan, develop strategies and have a right structure that could help you identify your prospective investors and provide them with what they might be seeking in a potential investment-worthy venture.

Following are a few steps that can help you build an effective strategy to raise capital.

Embrace the power of internet

It is no secret that the power of social media and internet is transforming the world, and also how the deals are found and accessed. However, a large number of businesses have still not experienced the power of internet to develop their capital raising strategy. Many businesses still adopt an old strategy, which includes listing a line about their business.

For businesses to find potential investors, it is important to be active on social media. This medium can be used to find potential venture capital investors and angel investors.

But remember, you need to be proactive and build an effective strategy to find investors and connect with them. This is easy said than done. This is when professional assistance can help. Experts, well versed with capital raising process, can effectively guide you and help you maximise the benefits that you can get from social media and internet when it comes to capital raising.

Don’t forget to start your investor relations program

It is important that you have an Investor Marketing or Investor Relations program from day 1, although you may have 2 or 3 investors.

Staying regularly in touch with your investors and key stakeholders can help you create a good marketing campaign throughout the process. These marketing materials can help you in your endeavour to raise capital.

Start briefing on a monthly basis and the communication material can be effectively used for your PR campaign.

Link your company news through media channels

Broadcast your company announcements as much and as wide as possible. Consistent announcement of your company news and achievements can help you reach much wider audience. There are some companies that develop effective campaigns by subscribing journalists, customers as well as other stakeholders through newsletters.

Go for crowd funding

Crowd funding is not new, but its integration with social media has made it an efficient tool to find investment capital. It can work wonders if you are active in industry specific forums or your localities or your target market.

For example, if you are into the business of developing dental equipments, a right approach can help you raise capital from doctors and dentists through crowd-funding website, given that they understand the niche of the product.
Go global

Businesses seeking capital can now have access to much wider choices in terms of capital investments, owing to the emerging markets.

Globalisation and social media are the two most essential factors to be considered by capital seekers. Considering the fact that your ideas and products may be in relatively higher demand outside your local markets, you cannot afford to ignore to go global.

If you are looking for capital raising Australia, you will find that a large number of venture capital funds are setting up their operations overseas to identify as well as invest in new opportunities.

Global executives

One of the best ways to find investors is contacting executives in your industry. If you are in the mining sector, you can look for strategic investors from the mine operators in the vicinity. Similarly, when it comes to IT industry, executives from well-established software companies usually invest in new start up IT companies.

Find out the public listed companies in your industry and identify who their executives as well as decision makers are.

Capital raising Sydney or in anywhere around the globe is necessary for a business to grow and flourish. A right strategy can help you achieve positive results. So, understand your business needs and set your goals to form a strategy that helps you meet your objectives, ultimately helping your business to expand.

May 19 2016