2 Excel Templates

1) Puma VS Adidas financial analysis

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The model can be adjusted very easily to any company. Keep you posted for the rest of the templates.

2) Net present value model​​​​​​

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Here are 2 Infographics for Today:

1) The importance of net working capital analysis

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2) Cash conversion cycle scenario analysis

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Here’s today’s “How to” guide:​​​​

How to prepare the company for selling and organize the M&A process

How to Prepare Your Company for Sale and Manage the M&A Process

Selling a company and organizing a merger or acquisition (M&A) is a complex process that requires thorough preparation and planning. Here’s a step-by-step guide to help streamline the process:

1. Conduct Financial Analysis

Review Corporate and Unit-Level Performance:

  • Analyze profitability, liquidity, and activity indicators (e.g., asset turnover, days inventory outstanding).
  • Focus on customer payment trends, inventory turnover by product category, and supplier payment terms.

Assess Profitability:

  • Analyze gross profit and EBITDA margins by product category, customer group, or region.
  • Normalize margins to account for one-off revenues or expenses.

Examine Financial Leverage and Debt:

  • Evaluate debt ratios, cash flow coverage, and fixed financing cost coverage.

Review Cash Flow and Asset Use:

  • Analyze cash flow structure (operational, investment, and free cash flow).
  • Identify non-operational assets for potential sale or optimization.

2. Create Financial Projections

Revenue and EBITDA Forecasts:

  • Prepare projections for all product categories, including assumptions for quantities, pricing, and margins.
  • Forecast operational costs by category and unit.

Balance Sheet Projections:

  • Estimate working capital components like receivables, inventory, and payables based on days outstanding.
  • Forecast long-term asset investments (CAPEX) and asset utilization.

Debt and Financing Plans:

  • Project debt repayment, refinancing, and additional borrowing needs.
  • Forecast interest costs and other financing-related expenses.

3. Prepare for the Transaction

  • Optimize Transaction Structure:
    • Define an ideal deal structure based on business needs.
  • Identify Potential Investors:
    • Create a list of strategic and financial investors.
  • Develop Transaction Documents:
    • Draft initial materials like a teaser and confidentiality agreement.
  • Build a Financial Model:
    • Analyze historical performance and develop valuation based on discounted cash flow (DCF).

4. Create a Detailed Information Memorandum

  • Include Comprehensive Data:
    • Business overview, market analysis, competition, management team, and SWOT analysis.
    • Financial history, operational performance, and detailed plans.
  • Highlight Financial Projections:
    • Clearly document assumptions for future growth and profitability.

5. Engage with Investors

  • Establish Communication:
    • Initiate contact with potential investors, share teasers, and handle confidentiality agreements.
  • Provide Detailed Information:
    • Share the information memorandum with interested parties.
  • Maintain Ongoing Interaction:
    • Respond to investor queries and provide additional documentation as needed.

6. Negotiate Key Deal Elements

  • Focus on Critical Terms:
    • Structure of the deal, exclusivity period, valuation range, and payment terms.
    • Address treatment of existing contracts, non-operational assets, and financing requirements.
  • Secure Agreements:
    • Negotiate and finalize term sheets, letters of intent, or memorandums of understanding.

7. Organize and Oversee Due Diligence

  • Facilitate the Process:
    • Prepare and organize data rooms with legal, financial, and operational documents.
    • Coordinate investor meetings and address due diligence queries.
  • Resolve Issues:
    • Address any concerns raised during due diligence.

8. Finalize the Deal

  • Negotiate Final Terms:
    • Set commercial terms for the sale or investment agreements.
  • Legal and Commercial Agreements:
    • Finalize the purchase agreement, shareholder agreement, or capitalization terms.

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