In the E-Show session this afternoon we had the opportunity to present Grafton Corporate to a large group of interested parties regarding the firm’s activity, the process workflows in Mergers & Acquisitions as well as the focus on the client as a vision to when originating and executing complex orders in corporate transactions.
• The M&A firm has executed four acquisitions for Soldene in the last 14 months.
• Closed operations allow its client to diversify into private clients and have been carried out in the main cities of Spain.
Madrid, October 19, 2017- Grafton Corporate Development; firm specialized in the execution of corporate operations, Mergers and Acquisitions (M&A), advises Soldene, a leading company in facility services, in its inorganic growth strategy in Spain, mainly of companies that serve private clients.
Since in 2016, Grafton Corporate Development advised Soldene on the first acquisition of Servisent, in Barcelona, the firm has executed three more operations in companies dedicated to cleaning and maintenance of buildings and offices. Currently, progress is being made with the acquisition of at least four more companies in different negotiation phases.
Throughout this acquisition process, Grafton Corporate Development has directed the search, identification and assessment of possible target companies for Soldene, having filtered dozens of companies until finding the target companies that fit the required strategic profile. Currently, progress is being made with the acquisition of at least four more companies in different negotiation phases.
The new acquisitions of Soldene are located in Madrid, La Alberca, S.A., Valencia ASSA Soluciones Integrales de Cleaning, S.L. and Barcelona, GR Neteges, S.L., confirming the territorial expansion of the company. Juan Manuel Esteban, CEO of Soldene, points out that “in such a fragmented sector and with such fierce competition, organic growth is very difficult, which is why we have opted for a policy of acquisitions throughout the national territory. Grafton Corporate Development services have been essential to address these processes successfully ” Ulises Vegas, Managing Director of Grafton Corporate Development, points out that “the operations carried out for Soldene are a good example of how it is possible to be successful in a well-structured acquisition program. In this case, there have been three important events: a client with a clear growth project, a sector with consolidation potential and a situation of certain economic stability that favors this type of transaction ”.
More information Grafton Corporate Development was founded more than a decade ago by Ulises Vegas, current Managing Director of the company. Its clients are multinationals, financial investors, private groups and family businesses in a wide range of sectors and areas of activity, mainly in middle-market companies. Grafton specializes in the execution of complex strategic projects, such as inorganic growth planning, company search and acquisition programs, company sales assignments, investor identification, integration plans, assistance in transactions, valuations and due diligence, among others.
Grafton Corporate Development is a professional firm specialised in the management of Corporate Development projects. The spanish firm count with team members with experience to contribute with a great value in the deal execution projects, either transactions or post-deal.
Industry, Energy / Utilities and Consumer Affairs have been the most active sectors in Europe in corporate operations.
Improving economic confidence and economic outlook, along with the availability of financing, propel many middle-market companies towards growth via acquisitions.
Grafton Corporate Development; A firm specialized in the execution of corporate operations, Mergers and Acquisitions (M&A), with extensive experience in international transactions, has presented its International Buy Side Initiatives report for the second half of 2017.
This report includes the international investment initiatives in Spain and Portugal for the coming months. In Iberia, during 2017, significant activity was taking place due to aggregate transaction values in the Services, Transportation, Construction and Utilities sectors. In addition, executing operations derived from the acquisition of Productive units in companies in Bankruptcy.
From Grafton Corporate Development, it is expected that, in the last months of 2017, M&A activity will accelerate compared to what happened the rest of the year. In general, 2017 has been a positive year, as there has been a notable increase in M&A activity compared to previous years.
As for who is showing interest in operations via M&A, middle-market companies try to take advantage of the situation of economic development and improvement in access to financing or investors to address inorganic corporate growth programs, via acquisitions. Furthermore, as Ulises Vegas, Managing Director of Grafton Corporate Development points out, “we are seeing that companies with a broad profile, ranging from national companies, private and family groups to multinational corporations or financial investors, establish inorganic growth as a strategic objective, putting ongoing procurement programs in a structured way ”.
Grafton Corporate Development firm specialized in the execution of corporate operations, Mergers and Acquisitions (M&A), with extensive experience in international transactions has appointed Álvaro Quintanilla as Director of M&A for the North of Spain.
Álvaro Quintanilla has a degree in Business Administration and Management from the Universidad Comercial de Deusto and has extensive experience in advising on corporate mergers and acquisitions. He has developed his more than 10 years of professional career in the industrial, services and real estate development sectors.
At Grafton Corporate Development, he will be in charge of contributing to the growth of the firm and executing the corporate operations carried out in his delegation, which is headquartered in Bilbao. “I am very pleased to join Grafton at a time when the business and industrial fabric has improved its appeal as a focus for mergers and acquisitions, and in our area in particular. As a dealmaker, I will be in charge of meeting the needs of our clients’ corporate operations in this territory, ”says Álvaro Quintanilla.
“La Naval must find an investor as soon as possible so that uncertainty is not generated and the business deteriorates”
Thousands of protesters yesterday asked for the continuity of La Naval. This morning in the Basque Country Today we talked about the creditors’ pre-bankruptcy in which the shipyard is immersed from the most economic point of view with Álvaro Quintanilla, director of mergers and acquisitions of Grafton Corporate in his Bilbao office.
It seems that between 10% -20% of acquisitions end “… in tears”, and this arises in aspects such as when the expected value of the acquisition is not generated, problems arise regarding legal aspects, non-suitability of the chosen candidate, complications in integration, among others. It is very logical that investors or buyers should have the absolute focus on ensuring that a particular corporate operation is a resounding success. There is a lot at stake, from time invested in the operation by members of the management, costs of financial advisers, lawyers, among others. It is very important to consider that the fall in the reputation of an unsuccessful operation falls directly on the team that has directed it. In other words, it is essential to ensure that the post-completion operation is a complete success to redound in value for the buyer and will encourage them to continue with the process on a recurring basis.
To mitigate all risks and ensure the success of the operation as much as possible, it is essential to carry out an intense preliminary work of research and analysis so adequate and deep that it confirms that a certain candidate makes strategic and financial sense at the end of the acquisition process. and its subsequent integration.
Aspects to review in the “pre-deal” phase:
Review in detail the candidate’s assets, such as existing know-how, industrial capacity, market access, market positioning, commercial team or financial position, which will help us grow and generate value after the acquisition.
To ensure that there is no more efficient and faster way for the growth of our company than the acquisition instead of trying an organic process.
Identify the elements that, in the integration, allow us to achieve increases in value both in the short and medium term, in particular those related to the achievement of operational, commercial, technical, financial synergies, among others.
Understand the strategic fit of teams and people in a post-deal situation, especially understanding the duplication of functions or departments and see the treatment that is going to be given to mitigate conflicts.
Correctly structure and value the operation in line with the investors’ strategy.
In general, answers to these questions are obtained by procurement teams and consultants, through meetings between the parties and especially by having access to quality information from the target company, in an organized data room.
If the company for sale does not provide quality information in a structured way in a data room ordered under a Due Diligence format, months of work will take place, with a request for information and adequate responses, it is very likely that the investor will reject the operation or entail unnecessary wear and tear on the process and frustration, as well as an extra cost incurred by professionals such as consultants, auditors or lawyers.
In the short term, the Brexit decision will have a negative impact on M&A in the rest of 2016 derived from the uncertainty regarding the collaboration model with the EU, bilateral negotiations of the countless trade agreements in force and the deadlines for the implementation of Brexit. Another immediate consequence will be a lengthening of the execution deadlines in M&A operations or even cancellation of ongoing processes. [/ Fusion_text]
In the medium term, it is expected that Brexit would cause assets located in the US to have a greater demand by part of investors. The turmoil in the market would cause IPOs to be reduced as well. [/ Fusion_text] However, there are possibilities for generating crossborder M&A opportunities in this context, where UK or EU companies wish to divest strategically their respective investees derived from uncertainty, preference for other markets, model change, applicable legal or tax legislation, etc.For any negotiation process in a corporate operation, an experienced advisor / dealmaker will take into account:
Being prepared is an essential element to achieve success and it will require all the parameters of the potential operation, understanding from the market or industry, comparable transactions and their multiples, legal issues, competition, apart from the company itself. A key element is to understand what is the real motivation of the seller and his commitment to the operation.
Establish the valuation range and the price among the multiple methods of valuation of companies, from the discount of cash flows, multiples of transactions or comparable listed companies. But undoubtedly a factor such as the strategic fit in the organization, identification of operational, commercial or technical synergies are fundamental, so that the investor establishes a price. No operation is the same as another, the trading environment is different and strategic aspects tend to vary. An expert advisor will have these parameters very analyzed and taken into account when moving forward in the process.
Determine the structure of the operation, which is usually as important as the valuation itself, since it is not the same as the consideration of an operation is cash or deferred – subject to future results (earn-out) or not, with call options, or actions, or referred to other legal aspects.
Advance and close phases in the documentation and negotiation process, having the perspective of closing as a sum of phases successfully completed, such as the negotiation of the Letter of Intent, Due Diligence, purchase agreement, exceptions, among others are elements that once they have been discussed and discussed, they should not go back to negotiate or change their mind. If so, the party’s reaction would be negative and would mean a stumbling block or even the end of the process.
Closure of the operation, for which it is essential to manage all aspects and people related to the operation in such a way as to mitigate the risks of surprises that could jeopardize the operation. Some of the keys that usually help in this closing task would be:
Create a good collaborative environment, so that the parties get to know each other and ideally they have some empathy so that when problems arise in the negotiation, they do not pose an unsolvable problem.
Prioritize, putting what is really important on the agenda, trying not to burn ourselves with non-relevant aspects. In this case, the advisor must keep in mind all the steps taken and those that are really missing for the closing as well as understand which of them may be eventual deal-breakers in order to put a solution as soon as possible.
Being strong with the aspects of the operation, but not with the people, so that maintaining the inertia of the process, with clear ideas of the next steps, evaluating the priority issues and how to solve them are usually fundamental steps for a successful closing.
After a low start to the year in the number and value of M&A transactions, derived from the uncertainty in the markets, the effect of Brexit, the slowdown of the Chinese economy, among others, a period of strong recovery is expected, derived from interest rates negatives and the generosity of the ECB. [/ fusion_text]
While PE funds have been generating a huge amount of cash to invest in in recent months, the essential difficulty is identifying targets to invest or acquire. In these circumstances, it is an ideal time to increase debt levels or substitute financing at lower rates. On the other hand, companies are seeing positive signs in their orders, sales and results after years of crisis in the eurozone. [/ Fusion_text] With these ingredients, an imminent wave of M&A operations is expected in the final part of 2016. The complexity for investors will be derived from the different angles to be considered in operations, decisions in relation to sectors or geographical areas, as elements that will be more critical than ever.
