PREPARING FOR YOUR COPORATE TRANSACTION
Any strategic corporate transaction will involve many stakeholders relevant to your company, as well as from your broader network of advisors.
Internally – you will report to your Board/shareholders and receive direction on transaction goals, your senior management colleagues, and involve departments across your organization to collect the necessary information.
Externally – you will typically work with financial advisors, accountants, financing banks, lawyers, and other specialist service providers.
The core advisor line-up for a major corporate transaction usually covers financial, legal, and accounting advice, as well as specialist services.
Each of your advisors will be principally responsible for providing specific types of strategic advice – for instance – financial advisors on timing, valuation, and purchasers; legal advisors on corporate, tax, and M&A law; accountants on historic financial information, closing accounts, and asset valuations; specialist advisors on resource valuations or compensation.
Efficient execution will mean your team needs to be prepared, not just to deliver on the transaction, but also to continue doing their day jobs throughout the process.
A well set up internal transaction execution team will have a single point person acting as the internal deal captain, clearly identified workstreams, and a single subject matter expert responsible for delivery on each workstream. The internal deal captain deals with the external advisors on a daily basis and reports directly to the CEO/Board/shareholders, depending on the reporting lines for the transaction.
There are significant advantages to having your internal deal captain in place ahead of the kick-off meeting. From the kick-off meeting, the deal captain needs to be ready to take the agreed deal objectives and translate those into your internal execution structures. They will need to have already built a clear understanding of your transaction in the corporate context, the timetable, and the advisors in place, so they can be effective from day one.
… vs. reallocating internally
An internal Deal Captain needs the seniority and experience to quickly earn the trust of and work effectively with the Board/shareholders and advisors, and the confidence to proactively engage upwards and laterally. They also need the capacity and willingness to leave their current role for at least six months, which may jeopardize business as usual.
… vs. making an external hire
A new permanent hire for a specific transaction is a significant cost. You will also need to think about how the individual changes roles after the transaction – the skills needed for a post-transaction role will be quite different to those necessary for the deal itself.
You or your Board members may already know of an individual who knows the company, or has been seen in action. This may be an ex-CFO of the business, a head of strategy or corporate development, or someone you have seen on other transactions. This personal knowledge can be very reassuring when you are making this important hire.
Depending on your country and transaction type, there may also be individual project managers available, with a relevant corporate background or who know a particular product.
We give you another option. When you hire The Deal Team, our Consultant Deal Captain and our CEO work beside your senior management team, full time throughout a transaction, backed up by the bench depth and collaboration of our entire Team. We deliver, in this way, a broader base of knowledge and experience than any individual. Our broader Team means that we can also provide flex capacity if needed, as well as eliminating the “key man risk” that is inherent in taking an individual project manager.
Successfully executing your corporate transaction requires your internal team to have three things: time, capacity, and knowledge. This could be in several areas, including the senior project oversight, specific technical knowledge, accounting knowledge, legal support, etc. Any of these can significantly impact your transaction execution. Review each team carefully against these three criteria – time, capacity, knowledge – to identify the gaps.
COMMON TRANSACTION BOTTLENECKS AND SOLUTIONS
In our experience, the three most common execution bottlenecks have been:
- Availability of historic financials: technical requirements (e.g. required GAAP standard/perimeter/audit comfort/valuations/lease accounting) and non-audit decisions (e.g. consistency with desired company story/segmentation/choice of KPIs/EBITDA definition)
- Clarity on perimeter and any required pre-transaction reorganisations (e.g. parent-subsidiary capex+personnel decisions, central services, cost allocation)
- Transition issues necessary to the transaction (e.g. Board composition, granting of security which limits strategic or financing flexibility, LTIPs)
An experienced deal captain will structure the transaction processes and keep a close watch across the many sources of deal risks, in addition to the transaction-specific issues. General deal risks can include:
- Capacity across the internal transaction team
- Day to day accountability oversight
- Team members’ understanding of workstreams and deliverables
- Team allocations and re-prioritisation of other projects
- Concerns about the “day job”
- Concerns about being the bearer of bad news or challenging “the boss”
- Traffic management of ad hoc and regular requests both up and down
- Accountability for external advisor workstreams
- Board/Shareholder reporting
- Go/No-go decisions
- Conflicting and interdependent timetables
Transaction execution excellence first relies on getting the basic building blocks right – just like the foundations of a building. It is essential to build a systematic, analytical approach to identifying needs, filling gaps, and clearly establishing roles and responsibilities.
Internally, these foundations include:
- CEO/CFO making clear the internal reporting lines for the project and reinforcing these when needed
- Imposing accountability by allocating a single specific person to be responsible for each workstream
- Weekly internal team project calls, with the workstream leads each reporting on their area
- Given the strategic nature of the transactions discussed, operating on a need-to-know basis across the team
Externally, your execution will be made smoother by:
- Having the all-hands weekly call agenda circulated 24 hours in advance
- Keeping external advisors accountable for delivery of their workstreams
- Identifying gaps in delivery that fall between advisors, or between company and advisors.
We provide specialist expertise and execution capacity for your corporate transactions. The strength of our client delivery comes from the bench depth and collaboration of our entire Team, backing up your dedicated Consultant on the ground.
We provide senior deal captain services for your strategic corporate transactions in equity, debt, and M&A, as these are the types of transactions that require significant management time, which puts your business at risk. Our transaction work includes:
- Reverse Mergers & De-SPACs
- Rights Issues
- First Time Issuers
- High Yield Bonds
- Acquisition Facilities
- Leveraged Loans
- Financial Restructuring
- Sell-Side, Buy-Side
- M&A Financings
- Continuation Funds
When you hire The Deal Team, our Consultant Deal Captain and our CEO work beside your senior management team, full time throughout a transaction, backed up by the bench depth and collaboration of our entire Team.
This team-led approach ensures your Consultant goes through a rigorous thought process that leaves no stone unturned. It means you benefit from the experience of multiple deal captains, and can get access to additional flex capacity where needed.
We maintain a deep bench of Consultants, so you can bring on board a deal captain at very short notice. This bench depth also allows us to provide flex capacity during our contracts, depending on your transaction needs.
Our expertise is in managing the specific needs of all types of corporate finance transaction, during the live phase of the deal.
We watch for delivery of not only the transaction-specific workstreams, but also all workstreams that could affect your transaction timetable. This is because those other workstreams will often include technically independent but important gating inputs for the core transaction. This may be your corporate reorganisation, a major change in your financial structure, or upgrades to your financial reporting systems.
Due to our focus on transactional work, we don’t deliver early preparation work or post-transaction services.
Every deal, company and day is different. Our job is to get our hands dirty wherever needed. An example of a typical day could cover the following:
- Early arrival to your office to check on room layout and IT setup for in-person advisor drafting meeting later that day
- Briefing to CEO and CFO on the overnight progress on a key legal issue, and turning around their comments on the management presentations
- Hosting drafting meeting, noting action points arising, and ensuring that lunch/refreshments arrive on time
- Leading weekly internal project management call with CFO and internal workstream leads
- One on one drafting session with ExCo member on their section of the management presentations
- Sit down with the C-Suite PAs to review the transaction calendar for the next few weeks, assess non-transaction commitments, and agree free slots for transaction work
- Bulk printing of next draft management presentations for internal rehearsal tomorrow
We understand that introducing a “new face” in such a key role can be disruptive.
Each of our Consultants has extensive experience in rapid team integration and setting up a “virtual PMO” – Project Management Office – across a company. This includes successfully integrating with the senior management team, working effectively with core departments within the organization, and engaging objectively with the Board or shareholders.
You’ll get the benefit of our Practice Manual which is our collected best practice, templates and procedures on transaction execution excellence. It covers not only how to set up a “virtual PMO” – Project Management Office – but also the specific considerations and bottlenecks for each transaction type, the templates which we put in place up front to eliminate specific deal risks, and the lists of “Red Flag” questions which we ask early on in the process to identify hidden risks for the transaction.
Your Consultant on the ground also speaks daily with our CEO who oversees all of our client delivery through daily discussions with your Consultant, and brings in the knowledge from the broader Team where needed.
We are happy to support you for as long or as short as you need, whether that is for the entire transaction, or simply for a few days. During that period, what you get is the dedicated full-time support from your Consultant on the ground with the support of our entire Team.
With our deep bench, you can also access additional flex capacity during our contracts, depending on your transaction needs.
Given the nature of the transactions we work on, we understand you will need to know your data is handled properly and strict confidentiality is maintained
We have invested in our own enterprise level IT systems and policies to keep your data secure. We’ll minimise the amount of company data we transfer outside of your network, by working with you to maintain security through the use of approved documents, virtual datarooms and other secure means.
You have full visibility over our fees which agreed upfront in our engagement letter. For a full term transaction, we charge a monthly retainer, plus staged success fees on transaction milestones. .
For shorter term assignments, these fees are combined into a total monthly retainer.
We have structured our fees with the staged payments so your costs are minimised if the deal does not proceed. We do this to align our incentives with your deal success, not with a prolonged execution.