Mergers & Acquisitions
ALPHA CAPITALIS is a member of Pandea Global M&A
Pandea Global M&A is an international acquisition network present in more than 20 countries around the world connecting investors and sellers of various businesses.
Transaction models can be as follows:
- Acquirer company acquires the Target company by purchasing the business shares / shares from the existing owners.
- Two or more companies, often of similar size, have decided to merge into a new company. Existing companies cease to exist and new larger company is emerging.
- A large company merges a smaller Target company after which the Target company ceases to exist and the large company increases its net assets.
- The acquirer wants to take over the Target company to achieve certain synergies
- Companies of the same size merge to achieve synergy and become stronger
- Companies of the same size are merging to “survive” in the market
- The acquirer has reached its maximum with organic growth and the only option for further growth is through acquisitions
- The acquirer wants to enter a new market
- Venture capital funds earn returns for investing through the purchase and sale of companies
Motives for selling a company:
- The seller decided to capitalize the years of entrepreneurial work
- The seller needs capital to save the current situation
- The seller needs a strategic partner and know-how strategy
- The seller has no successors and wants to sell the business
- The Founder’s family has inherited business shares and they do not want to continue running the business
- The credit institution has taken over the business interests / shares and wants to sell the financial assets
- The bankrupt company has financial assets (share in other companies) that it wants to sell
Documents for download
Business Transfer and Valuation
Time value of money
Members of a Global Network
ALPHA CAPITALIS is a member of Pandea Global M&A, a global acquisition network that connects investors and sellers of various businesses. Pandea Global M&A operates with an emphasis on mergers, acquisitions, recapitalizations and various types of joint ventures, intending to place local projects on the international financial market.
We have provided our clients and partners with access to a large network of international investors. ALPHA CAPITALIS opens access to cross-border transactions for local businesses, and for international investors, we act as a “one stop shop” and a local partner. If you have a project for which you need an investor or if you are selling an existing business, feel free to contact us to present your case to international investors.
Clients and partners
Access to a large network of international investors
Access to cross-border transactions
We act as a “one stop shop” and a local partner
You started your business more than two decades ago and you are aware that the moment will come when you need to transfer management to successors. You, as the founder, do not have full confidence in the methods of leading your successors, and they want autonomy in management so that they can prove the effectiveness of their management methods. Sometimes in the best intention of both parties to do the best for the organization, conflicts arise which disrupt professional and family relationships.
Plan your transfer of ownership and increase the chance of a successful transition to the younger generations through a methodological approach.
We support founders and family members in transferring ownership to the younger generations or to existing / new management through the following activities:
1. Preparation of successors
The successor must decide whether or not he wants to continue the family business. He should also be aware of what is expected of him in the future and what his responsibilities / obligations will be. Successors need to be “equipped” with the necessary tools and skills for the future leadership of the organization and gradually be introduced to the job in accordance with the defined program.
2. Preparation of a company
It is necessary to create a company (organization) that is self-sustaining, profitable and transferable. Self-sustainability implies that the company is not dependent on the presence of owners. Professional management should be formed so that the entire system does not collapse when the founder is removed from the organization. Profitable – to be competitive in the market and make a profit for the owner. Portable – that the financial information for the owner is completely regular and transparent, and that there are grounds for the company to change its owner at any time.
3. Family preparation
It is necessary to respect the opinion of all stakeholders in the family and define a set of documents, a way of making decisions and involve all stakeholders who should be involved. The focus should be on how to make a transfer of ownership (who has the right to property, when it is performed and how it will be made). If there are more successors, some of whom are not interested, then an assessment of the value of the family business should be made and the equivalent of the money paid to a party not interested in continuing to run the family business. Another important point is defining a family forum, which includes how decisions will be made, how they will behave when strategic decisions are needed and the like, and what is the role of family members in managing, who the forum members are, when the forum is being held and in what way, and how the forum will work.
4. Preparation of the founder
Most employees have always asked the founder for a lot of decisions. Thus, the founder had a significant function in management, decision making, remunerating of employees, building relationships with customers, suppliers and the like. The founder’s challenge is that he will no longer have a central function and that he must leave that business and management to the younger generation or to the successor. Therefore, it is first necessary to provide the founder with income to maintain the same standard of living. Then give him a set of rules or define the mode or behavior of how he can be involved in the business, what type of information he will receive, submit specific financial statements to him through informal meetings or in a formal way.
Business transfer models can be:
- Transfer of business to family members
- Selling of a company to an employee or manager of the company
- Selling of a company to an external customer or manager
- Initial Public Offering (IPO)
- Liquidation of the company
Company merger and takeover
If you have started thinking about mergers and acquisitions, it is the right time to choose a specialist to help you get into these kinds of transactions.
The process itself is serious and complex and requires good preparedness and education of all parties involved in the process. Therefore, choosing the ALPHA CAPITALIS team will give you full support, assistance and advice on the transaction with minimal risk for all parties involved, while fulfilling the wishes of the owners.
Our approach includes understanding the transaction and company, motives, synergy, risk and pricing.
- how to conduct the transaction
- whom to sell
- how to sell
- what documentation is required throughout the process
- how much your business is worth
- decision to sell
- preparing the company for sale
- whom to sell the company to
- how to reach investors
- making teasers
- signing of NDA (Non Disclosure Agreement)
- Information Memorandum
- letter of intent
- due dilligence
- drawing up a sales contract
- drafting a company contract
- company takeover
- Preparation of business or its assets for sale
- Purchase of the minority shares in the company by leading stakeholder
- At the request of the financial institutions that take shares in the company collateral as approval of certain forms of financing
- Preparing your company for recapitalization or IPO (Initial public offer) of future company shares
- Analysis of the macroeconomic environment
- Market / segment analysis of business and competition
- Analysis of the company subject to valuation
- Developing a financial model
- Proposal of valuation model
- Making a valuation
1. The discounted cash flow method (DFC method)
The discounted cash flow method is most commonly applied when a company’s assets have the potential to generate revenue and when there are reasonable projections of future income for the company’s assets.
In assessing the value of the company using the discounted cash flow method, the management of the company should first and foremost critically and reasonably consider the historical business and financial results and subsequently analyze the business environment in which the company operates. These steps are necessary because value estimation depends on revenue projections for future periods, and this projection, in turn, depends precisely on the factors mentioned above.
There are four steps to assessing a company’s value using the discounted cash flow method:
- Estimation of free cash flow for the planning period (5 to 10 years)
- Estimation of the terminal value, i.e. the value of the business beyond the forecast period
- Discounted free cash flow at a discount rate
- Subtraction of net debt from the present value of free cash flow
2. Comparable transactions method
The comparable transaction method, also known as the transaction guidance method, uses transaction information for assets that are the same or similar to the subject asset in order to acquire value indication. If several recent transactions have occurred, the appraiser must consider the prices of identical or similar assets quoted or offered for sale if the relevance of this information is clearly established, critically analyzed and documented.
The comparable transaction method can utilize a plethora of various comparable evidence, also known as the comparison unit, that forms the basis of the comparison. Some of the many benchmarks used in valuing companies include EBITDA (earnings before interest, taxes, depreciation and amortization), earnings multipliers, revenue multipliers, and book value multipliers.
Key steps in the process of valuation using the comparable transaction method:
- Identify the units of comparison used by participants in the relevant market,
- Identify relevant comparable transactions and calculate key valuation indicators for those transactions,
- Carry out a consistent comparative analysis of qualitative and quantitative similarities and differences between comparable assets and the underlying assets,
- Make the necessary adjustments, if any, of valuation indicators to show the differences between the assets in question and comparable assets,
- Apply harmonized valuation indicators to the underlying assets, and
- If multiple valuation indicators are used, adjust the value indication.
3. Trading Multiples Method
The benchmarking method uses comparable publicly traded information that is the same or similar to the underlying asset to acquire a value indication.
The method is only used when the asset in question is sufficiently similar to a publicly traded comparable asset to make the comparison meaningful.
The key steps in the benchmarking method are:
- Identification of valuation metrics / comparable evidence used by participants in the relevant market,
- Identification of relevant guidelines for comparable exchange transactions and calculation of key valuation indicators for those transactions,
- Carrying out a consistent comparative analysis of qualitative and quantitative similarities and differences between comparable exchange transactions and the underlying assets,
- Making the necessary adjustments, if any, with indicators in the valuation to reflect the differences between the assets in question and comparable publicly traded assets,
- Applying harmonized valuation indicators to the underlying assets, and
- If multiple indicators have been used in measuring the valuation, determine the weight of the value indication.
In the event that you are a buyer or seller, engaging the ALPHA CAPITALIS team gives you the assurance that any issues that arose during the due diligence are properly displayed.
We help you:
- improve understanding of the target company (making the transaction more likely to reach its goals)
- detect all risks and irregularities
- identify and understand key success factors (KPIs)
- point out the advantages that may underlie development or the disadvantages that can be addressed
The due diligence services we provide include financial and due diligence
Financial due diligence
As part of the implementation of the financial depth survey, we will present trends, interpretations of values and implications of historical results, with emphasis on:
- Remittances, Assignment Date, Payment Dates, and Payment of Operations Liabilities,
- Liquid ratio and accelerated liquidity,
- Revenues and Costs Structure of Products Sold, Gross Margin,
- Fixed Operating Expenses Structure (OPEX) and Impact on EBITDA,
- Normalization of EBITDA,
- The structure of capital, the movement of net debt, the ratio of selected earnings and debt ratios, debt ratio and cash flow, and covering fixed financing costs,
- Analysis of the operational and cash cycle in days,
- Analysis of the structure and degree of utilization of long-term assets, historical CAPEX and the need for additional CAPEX in the future,
- Identification of nonoperative assets, sale or placement,
- Conformity of accounting policies used with International Financial Reporting Standards
Review and analysis of tax returns and cost accounting (tax deductible costs), used tax reliefs, related party transactions and potential risks, an overview of remuneration paid to foreign recipients and a calculation of tax deduction.
Overview of annual and monthly VAT, tax and analytical account accounts showing VAT and prepayment obligations, sample and outbound sample checks.
Income tax and contributions:
Comparison of Monthly ID Forms with Payments on Payments Accounts and Payments Accounts, Controls of Income Accountability.
Entry of a sole proprietorship into a company
Are you a sole proprietor and have decided to become a company?
As a sole proprietor, you generate income in excess of HRK 3,000,000 and you pay income tax and VAT. You operate double-entry bookkeeping and your business is no different from a company.
If you want to reduce legal risk and protect your personal property, then with the full support of the ALPHA CAPITALIS team you can transfer your sole proprietorship to a company.
When transferring a sole proprietorship to a company, we offer support for the following activities:
- Starting of a company (public company, limited partnership, joint stock company, limited liability company or economic interest association)
- Transfer of real estate and movable property from sole proprietorship to a company
- Drawing up contracts for the transfer of the economic entity
- Deregistration of a sole proprietorship
- Communicate all activities with interested parties
- Deregistration of employees from the sole proprietorship and their registration to the company
More about transaction services
S gledišta financiranja, mala i srednja društva su zbog svoje veličine, nedostatka specifičnih znanja i vještina te prirode rizičnosti poslovanja u nekonkurentnom položaju u odnosu
Studija izvodljivosti (Cost-benefit analiza) je pomoćni alat koji se koristi prilikom donošenja strateških odluka za investiciju u neki projekt čiju financijsku i ekonomsku isplativost nije
Jedna od glavnih pogrešaka koja se pravi prije preuzimanja trgovačkih društava jest izostavljanje poslovnog plana, a dobro strukturirani poslovni plan je neprocjenjiva prednost pri planiranju
Trgovačka društva možemo tretirati kao organizam koji se neprestano mijenja i razvija. Od osnivanja do prijenosa na nove vlasnike ili likvidacije, društva prolaze kroz različite