A newco has been formed as part of a national mandate to acquire/integrate smaller players into one consolidated/merged entity. What would be the most practical due diligence and valuation process for this M&A activity to determine their respective shareholding.
Successful integration of three companies simultaneously requires meticulous planning, effective communication, strong leadership, and the ability to adapt to evolving circumstances. Each acquisition will have its unique challenges, and it’s essential to tailor the integration approach to the specific characteristics and needs of each company.
It is important to note that the specific approach to acquiring and integrating three companies simultaneously may vary depending on the size, complexity, and industry of the companies involved. Engaging experienced professionals, such as integration consultants or project managers, can also help facilitate a successful integration process.
Creating a consolidated entity from smaller players under a national mandate can be an arduous process involving numerous critical steps. One of the most important aspects is performing comprehensive due diligence and valuation to determine the fair and accurate shareholding for each player.
I would tend to go for a valuation based on comparables as a basis to get a high level idea of the intrinsic value of each company. Next I would take other elements into consideration such as management, IP, operational competitive advantage, IT systems, … to adjust (increase / decrease) the overall value. You can take a detailed approach (with assumptions) or a more generic by stating for each element that it impacts the overall value by the following selection: (+2% / +1% / 0% / -1% / -2%) –> of course you can adjust the selection field.