Integrated solution for the investor / buyer

When the buyer acquires a business or the investor makes investments, they have questions arising in various fields. We offer an integrated solution to the buyer / investor to support their business acquisition or investment making process. It provides the client with a single point of responsibility and saves expenditures through economies of scale.

Our work falls into the following main stages.

Stage 1: Analysis of bulk information on the transaction object

We carry out the following actions at this stage:

• Analyze bulk information publicly available on the transaction object in order to:
  • uncover negative information;
  • uncover information contrary to that is set forth in the seller’s information memorandum;
  • confirm information contained in the information memorandum.
• Uncover inconsistencies between different sources of information on the transaction object, including files submitted to the buyer / investor by the seller’s representatives.
• Analyze websites of the seller’s customers in order to confirm information provided by the seller from external sources.
• Form a list of questions and topics to be discussed with the seller’s representatives following the results of this stage.

If the buyer / investor has data on the financials of the transaction object, the basic analysis of investment attractiveness can be made at this stage, namely:

• Payback period (NCF)
• Dynamics of the cash flows generated by the investment project on attracted (borrowed) funds cost-plus basis
• Risk assessment in terms of own and attracted funds (WACC)
• Return on invested capital (ROIC)
• Return on equity (ROE)
• Returns on investment (ROI)
• Accounting rate of return (ARR)
• Internal rate of return (IRR)
• Profitability Index (PI)
• Tax burden
• Operating profit (NOPLAT)

Stage 2. Marketing analysis

2.1. Desk research with reporting:

• Development of research methodology
• Organization of a specialists' team systemic work
• Data collection
• Data classification
• Data verification and analysis; reduplication
• Report preparation
• Presentation of results

2.2 Expert survey with transcripts:

• Development of expert interview rules
• Forming a list of potential experts and determination of their attainability
• Provision of contact with potential experts
• Expert survey
• Survey quality control
• Transcribing of interviews, data formatting
• Analysis of the expert survey results

Stage 3: Comprehensive check of the transaction object — Due Diligence

At this stage, we conduct the following with respect to the transaction object:

• Check bookkeeping accuracy.
• Check tax computation accuracy.
• Uncover tax risks and develop recommendations for their elimination / minimization.
• Check contractual and other documentation, statutory and corporate documents in order to uncover hidden liabilities with respect to the transaction object and other legal risks that may either involve additional costs on the buyer / investor part in order to maintain availability of the acquired rights to the transaction object or lead to the loss of such rights.
• Estimate uncovered violations and risks in monetary terms where possible (necessary for sound reduction of the transaction price).
• Patent analysis. We check legality of intellectual property ownership.

Stage 4: Development of the transaction scheme

Within the framework of this stage we conduct the following:

• Develop financial and legal scheme of the transaction with regard to circumstances uncovered at the previous stage.
• Determine tax optimization opportunities for transaction parties.
• Determine legal form of additional guarantees from the seller, if such guarantees are needed according to results of the previous stage.

Stage 5. Carrying out the transaction

At this stage we conduct the following:

• Prepare all required documents (contracts, decisions, minutes of meetings, etc.) including documents in English, if necessary.
• Formalize mutual obligations of the parties, depending on the risks for the parties (primarily for the buyer / investor) uncovered at the third stage.
• Register necessary legal entities including ones outside the Russian Federation.
• Open bank accounts including ones outside the Russian Federation.
• Arrange entering into an agreement in the presence of the notary, if necessary.
• Other actions depending on specifics of the transaction scheme agreed at the previous stage.

Stage 6. Selection of senior staff — Executive search

The Client may require renewing the following positions in the acquired business:

• Chief Financial Officer
• Chief Accountant
• Head of the Legal Department
• Senior and middle managers

In addition to the Executive Search service as such, we are able to test qualification and experience level of the candidate in relation to the first three positions. Such testing involves senior partners of the company and managers of relevant departments.