Transaction Services

Case Study „Transaction Services“

Situation

  • Strategic decision by management to enhance the personnel service provider business
  • Mandate for comprehensive support in the transaction process: Guidance and advice in all individual steps of the process and provision of the following product based services
    • Red flag report: Early identification of potential deal breakers by means of a due diligence deliberately limited in scope (-> Red flag due diligence) as basis for the decision regarding continuation of the transaction process
    • Value indication based on the results of the red flag report for the purpose of an indicative offer (Letter of Intent)
    • Full scope financial due diligence in order to identify financial chances and risks and their impact on the purchase agreement and price
    • Contract assistance: Advice for drafting the share purchase agreement while taking into account the financial contract risks associated with the transaction (working capital guarantee, net debt etc.)

Solution

  • Presentation and analysis of historical and projected net assets, financial position, and results of operations
  • Derivation of underlying earnings
  • Presentation and analysis of working capital fluctuations during the year
  • Presentation and analysis of net debt
  • Presentation of material contracts
  • Analysis of material customer structures and dependences and of gross margin development related to main customers
  • Presentation of company structures and business operations
  • Presentation of planning assumptions and plausibility check on budget calculations
  • Analysis of historic budget accuracy
  • Analysis of current trading
  • Presentation and analysis of intercompany supply and service relationships
  • Industry-related areas of analysis in the field of personnel services
  • Calculation of an indicative enterprise value based on discounted cash flow and multiple methods
  • Comprehensive advice in the context of SPA negotiations (legal structuring of the transaction, definition of price determination and adjustment clauses, reps and guarantees etc.)

Result

  • Successful takeover of targets
  • Identification and clear presentation of actual and potential chances and risks associated with the targets in the form of the red flag and full scope due diligence reports and respective guidance in each process step
  • Subsequent merger of targets with the parent company

About the client

  • Leading provider of personnel services with > €1.0bn of revenues and > 15,000 employees
  • > 130 branches across Germany