M&A-STRATEGIC ALLIANCES

Sometimes entering a new market makes most sense through the inorganic acquisition route or through a strategic alliance. Even in an organic entry, a distribution or a channel partner is usually an important element. In a foreign market, such maneuvers become even more critical, choices are not easily obvious and the evaluation may not be straightforward given the different business realities.

The Jai Group is your partner in navigating these complex processes of search, evaluation, due diligence, and negotiations. 

Our approach is different from that of a typical investment banker because we are client-focused and not deal-focused. For the client, we try to construct the ideal business choice rather than be wedded to any particular deal. Our compensation and mode of engagement are also structured to reflect this alignment of interests. Most of the time our mandates are buy-mandates. We also sometimes undertake sell-side mandates, when there is a strategic angle involved and we can add more value.

DEAL SOURCING

Target Search and Filtering: Establish ideal profiles for distributor candidates/alliance partners/M&A targets and establish a search strategy, by

  • identifying segments to search from the advantages and disadvantages of each segment and
  • working with our local contacts to also develop a bottom-up search strategy

Developing a Pitch: Develop a teaser/information memorandum that reflects the customized pitch for any specific group of investors/buyers/channels

Filtering/Prioritisation: Help filter the potential buyers/sellers and help prioritize/rank the prospects for further engagement

FINANCIAL EVALUATION

Building a Valuation Model: To establish the financial basis of the deal, a valuation/business case model will be built that will be used as the quantitative basis for negotiations at every stage of the process.

Establishing a Term Sheet/Contours of a Deal: We work with the prospects to develop the broad contours of a deal using the valuation model as an aid and document it in the term sheet, which could be non-binding before embarking on a due diligence exercise.

DUE DILIGENCE

Once the non-binding term sheet is signed or another suitable framework that defines the broad contours of the deal is agreed upon as in an MoU, we start the process of business due diligence, while helping in the recruitment of service providers from the legal/accounting side to do the financial/accounting due diligence.

STRUCTURING PARTNERSHIPS

Negotiations: We formulate a negotiation strategy and help you execute it, incorporating the due diligence findings in the valuation model.

Deal Closure: On deal closure, we work with you to help draft the shareholders’ agreement along with your lawyer and to coordinate the administrative aspects of the deal closure.

Development of a Joint Business Plan/Integration Plan: This step will formally document the synergies arising from the merger/acquisition. In the case of the distributor search/strategic alliance process, this will substitute the pre-term sheet valuation model.