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Henrik Mølgaard
Partner, Deal Advisory, M&A
BDO Corporate Finance are specialists in advising on and carrying out mergers and acquisitions and we have a particular focus on acquisitions of smaller and medium-sized companies or subsidiaries of larger corporations. Impartiality is our strength in the process of acquiring companies.
Many questions have to be answered. How do you find the right target company to buy? How do you contact the seller, who might be a competitor, in the most appropriate way? What is the right price for the target company? We provide advice throughout the process, and our job is to assist our clients in acquiring the target company on the most favourable terms.
Our impartiality enables us to make a more thorough examination before we establish a nuanced and open dialogue with the seller. Companies are generally cautious about passing on information that could be used by a competitor, so it is a good idea to involve us in the acquisition process.
Our strong BDO network is an advantage in an acquisition process
We help to find the right target company for sale and here we use our extensive network. A network that is enhanced by the fact that we are the market leader in Denmark when it comes to selling businesses – particularly SMEs. When the search begins, we look at our own business customers that we are close to and know in depth. We can quickly initiate a dialogue with parties who are interested in selling their business.
The network also includes thousands of contacts amongst lawyers, bankers and external businesses, so the network, and hence our search, is wide-ranging. The search process is based on the buyer’s criteria regarding industry, size, earnings and geographical location, etc. The process is also adjusted according to whether the buyer intends to manage the business or play an active role at board level. We can initiate dialogue with a number of target companies and, based on this, we prioritise them together with the buyer. We select the most relevant targets, which are then examined in more depth in order to assess the value and conditions of an acquisition.
Valuation and analysis of the business – no two businesses are alike
We know what pulls the overall value of a company up or down, and we get to know the business, the company’s external relationships, including competitors and industry conditions, before we make our assessment. We use various methods, looking at earnings, cash flow and capital structure taken as a whole. Our analysis includes an internal review of the company’s products and services, the knowledge and competences of management and staff, and a thorough financial analysis of income statements and balance sheets. Possible synergies in the form of savings or additional earnings, when the buyer and seller companies are combined, are assessed and examined in detail.
The negotiation phase
We know that the period of negotiating the acquisition of a company is sensitive. Apart from the value of the company, there are many other aspects at stake. We have to find the compromise that keeps the acquisition process on track and both serves the buyer’s interests and makes the transaction possible. Our role as an active party is not complete until the target company has been acquired, and the transfer agreement between the parties has been signed.
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