Company transactions require experience, know-how, and a lot of diligence. BID Equity is known for a collaborative and professional acquisition process. We strive to be a reliable and transparent partner both for entrepreneurs as well as M&A advisors on the sell-side to ensure a smooth completion of the transaction.
We ensure a collaborative, professional and rapid transaction process
The typical transaction process follows a well-defined set of activities as visualized in the following illustration.
1 – Origination
There are many ways how the entrepreneur and BID Equity find to each other. In many cases, the entrepreneur enters discussions with financial advisors who then find suitable investors such as BID Equity. In other cases, BID Equity approaches the entrepreneur directly to jointly investigate a future partnership or sale of the company.
2 – Execution
During initial screening the seller and BID Equity have a series of discussions about the objectives and strategic rationale for selling a stake of the company. Both parties need to jointly understand how BID Equity can be a best next owner for the firm: How we can help to achieve the next level of growth, professionalism, and innovation. We jointly reflect on the current market position, strengths and weaknesses, as well as potential opportunities and threats.
If the entrepreneur and BID Equity both conclude that an investment could be beneficial to both parties, BID Equity will pursue an in-depth assessment including a rough evaluation and first hypothesis on the transaction structure. These parameters will be outlined in a formal indicative offer. If a mutual understanding about the general terms can be reached between the entrepreneur and BID Equity, both parties formulate a Letter of Intent (LOI) that summarizes all the transaction parameters including a cost coverage clause by the vendor before pursuing the detailed due diligence.
During the detailed due diligence BID Equity will nominate additional external advisors to conduct a full commercial-, financial-, legal-, tax-, and HR-assessment. The company compiles all required documentation in a data room that can be securely accessed by all relevant parties. The findings will be presented to the financing banks and potential co-investors.
At the end of the execution the parties align on the optimal transaction structure and develop the legal contract. This step typically involves a series of discussions and final negotiations as alternative structures and tax implications need to be carefully evaluated. Once all is agreed, BID Equity and its investment committee sign off the acquisition and all involved parties (seller, banks, co-investors, etc.) proceed with the contract signing.
3 – Value creation
In the years following the acquisition the management team and BID Equity will jointly focus on implementing the strategic and operational measures to improve the company’s performance and market position. Each transformation is a tailor-made program addressing every aspect of the business model, and it can include external growth options such as bold-on acquisitions to accelerate growth and fast-track internationalization.
4 – Exit
Somewhere in the future a point will be reached where the company has reached a new state, and BID Equity has fulfilled its role. New options will appear with better suited owners, such as strategic investors that can take charge of the nex development cycle. At such time BID Equity will—in close alignment with all other shareholders—decide to exit the investment and find the optimal future owner.
Completion within 8-10 weeks from initial discussions to signing
Each transaction process is slightly different as the needs of stakeholders vary. In an optimal setting with significant alignment between all parties, the transaction can be completed within 8-10 weeks from the initial discussions to the final signing.
The following chart outlines the typical steps and durations during the execution process.