Transaction and financing

The most fundamental part of a deal is to perform a comprehensive due diligence of a business being acquired (buyer perspective) or being sold (seller perspective), in order to evaluate its future potential and vulnerabilities. In addition to standard due diligence engagement Econlab brings additional value through added analytical focus. This is especially important in fields of banking, insurance, energy markets and other endeavours with opaque value drivers. Our extensive experience in financial risk management also ensures we will uncover all the potential risks facing the business or transaction.

As part of the transaction process, we help clients uncover any potential deal breakers, navigate the closing and deal structures, as well as help understand the implications of warranties and indemnities.

Synergies are a key driver of M&A activity, but they are also the part that most commonly goes awry in deals. In fact, in the majority of transactions, planned synergies fail to realize. This often leads to the buyer paying for synergies that are non- existent, or failing to identify synergies that would drive the target value over the finishing line. Therefore, having a realistic look at the synergies prior or during the transaction process is essential, and often strategically more important than a standard due diligence exercise.

We help our clients identify the key synergy areas, help them financially evaluate them, and help put in place a feasible plan to capture these synergies.

With these critical steps performed in an objective manner, we can help for the deal to succeed, or often more importantly, help you avoid a deal that should not go through.

Closing an acquisition is only the end of the first chapter in the acquisition process. The main part involves capturing the value of evaluated synergies. This process is far from easy and should not be left as an afterthought. EconLab can help formulate an effective integration strategy and assist in its execution. As part of the process, we can help the C suite in making the tough choices, analyse the strengths and weaknesses of each entity to determine what should be the joint modus operandi, and create investment and divestment plans that streamline joint operations.

At times businesses tend to hit a rough patch. During those times, it is critically important that the direction taken is the right one. We can help companies or banks in evaluating the businesses' current state and help craft a plan to get the company’s finances in order. For a company for which the overall direction is not yet clear, we can perform an independent analysis that reveals in an unbiased manner, what is in the best interest of funders. If the company’s operations have sufficient long-term potential, we can create a restructuring plan that gives the company appropriate leeway to operate without compromising the lender position.

For many ventures, acquiring affordable debt financing is a key driver of shareholder value.

To secure such financing, banks need to feel exceedingly comfortable, that the business being funded is going to be sustainable. Econlab can help in getting this message across. We help clients in loan applications, bank negotiations and drafting appropriate financing structures.

Having a very close relationship with most of the local banks, we can provide insight on how banks are approaching the financing decision. This helps us craft financial plans that are well supported by fundamentals, and that take uncertainty into account. This way, we reduce the unknowns for the bank, making it easier for them to extend favourable terms.