M&A. Mergers and acquisitions: transaction support

Buying an existing business makes it possible to obtain operating assets, clients, a team and cash flow faster than creating a similar company from zero. A well-prepared transaction combines business valuation, asset review, payment structure and transfer of corporate control in one plan. For the owner, this makes it possible to understand in advance the price, sources of financing and economic result of combining companies.

Recently, issues connected with market redistribution of ownership rights and changes or corrections to companies’ development plans have become more important. Integration processes aimed at solving such issues are more often called mergers and acquisitions.

From a legal point of view, merger and acquisition processes are connected with:

• company reorganisation (merger, accession, transformation);
• acquisition of assets (property complex, shares);
• exchange of shares (swap).

What are the main goals pursued by buyers in merger and acquisition transactions?

• Achieving a synergy effect (a synergy effect means increasing the efficiency of the combined company above what the two companies already do or would do as independent companies);
• Obtaining a larger market niche or entering a new market;
• Access to additional resources and new technologies;
• Obtaining tax benefits;
• Business diversification

Mergers and acquisitions are supported by the fact that buying a ready business has its advantages over creating a company from zero. After successfully completing an M&A transaction, you receive:

• An operating company with an already defined and developed set of goods or services;
• Access to an established network of suppliers and established distribution channels;
• A defined niche in the market of interest;
• The possibility of obtaining bank financing at lower interest rates, because banks are more willing to lend to an operating business than to a new business with many risks;
• An established staff team.

Such transactions require a serious and balanced approach. It is necessary to take into account all aspects of integration: economic, legal and tax. In this respect, assistance from professional consultants with high qualifications and experience makes it possible to choose the most suitable merger or acquisition option. An important part of the integration process is high-quality preparation of documents taking into account all details of current legislation.

Until now, companies, with rare exceptions, have carried out mergers and acquisitions independently, or used consultants who specialise in one area, for example legal work, and cannot consider such processes as a whole. Today, when economic relations have become more complex and varied, the regulatory framework is developing and requirements for participants in economic relations are increasing, the need for a higher-quality approach to merger and acquisition tasks is clear.

TAXC Limited provides the following services for buying and selling a business (transaction terms):

• Search for a suitable business or a buyer for it.
• Professional valuation.
• Detailed review of business information (Due Diligence).
• Preparation of an investment memorandum (business description for an investor).
• Negotiations.
• Preparation of documents supporting the transaction.
• Tax and accounting planning of the transaction.
• Organisation of a safe payment scheme.
• Preparation of the business for integration.
• Legal protection of the transaction.