Entrepreneurs expect that
their objectives will be understood, they will be able to see
their alternatives, their deal
will be negotiated and
closed professionally.
Nothing is more important to quality of the service than the fact that it
is really needed.
We believe there is always a strategic move our clients can make to
enlarge the capital gains they will be able to realize. Our clients feel it and the
feeling of the opportunity makes them restless in their quest for the
solution. We spend our time understanding the client's objectives
rather than peddling a certain investment banking idea. We do not have a value
proposition for everybody and we have to be very selective about our
clients but when we see what we can do for you - you have probably found
the solution.
Open dialog with the client results in our understanding of what is to be done in
the best interests of our client at the moment and what we can help in:
•
Securing Control
• Financing
Growth
• Selling Control
When objectives have been clarified we look for best solutions available in
the market. There always are alternatives, and of them we choose together with our client the best deal to pursue.
Managing international private equity fund (UVC Ltd.), we saw striking
differences in access to capital for companies belonging to the same investment class
in regard to their fundamentals.
We feel that the reason for these differences was the idea shared by entrepreneurs and their advisors
on what can be achieved in today's capital markets. Sometimes we met
entrepreneurs selling their business better than their financial advisors
because as businesspeople those entrepreneurs did not forget about exploring the demand and
paid less attention to routine matters of documentation.
Why can we do this better? We simply work harder looking for
alternatives. We probably understand buy-side better than a number of our competitors since unlike them
we have years of working in private equity funds and acquisitive corporations, which involves a lot of deals done
and rejected by us on the buy-side.
Any deal is a child grown up in negations: it requires
maintaining constructive relationship, attention, balance of "yes" and
"no", patience, and fair judgment. Experience of success in done deals
can hardly be counterbalanced by anything.
Sophisticated valuation helps us understand what should be achieved and
what is achievable with this particular counterparty. In order not to lose a good opportunity to sell or invest,
the valuation should be reasonably
aggressive, while being reliable enough to prevent closing of a bad deal.
In our sell-side deals done so far our clients have never closed below our
valuation. Our private equity investment in Newspaper Direct, where we
topped other competing funds, resulted in the rate of return that justified the
price we had paid.
When our clients have signed the final agreement (Share Purchase Agreement, Investment Agreement,
etc.), it is the deal structure
that translates the contract price into a combination of the rights and
obligations with a certain value to our clients. In fact, it is easy
to be misled about this value. We implement our advice on deal structure through painstaking
negotiations and deliver solid agreement rather than a conceptual term
sheet. As a result, through closing under our guidance our clients receive what they expect
to receive.
From the start we work on the transaction with legal advisors, who we have
known for years or who have been recommend to us by our best business partners.
Since an excellent agreement on transaction is a plan, the result is
delivered through its implementation. The final product of our efforts for
our clients is cash or purchased securities transferred to them.
Certain events may or may not happen, and sometimes contingent
provisions should be professionally re-evaluated and applied. It is good
when both parties are interested in fastest closing, but it is not
always the case. Sometimes it is easier to negotiate an
adjustment to agreement that produces the same result rather than to follow the
covenant, which becomes a burden to both parties due to unexpected external
events.
We can also provide our client with help managing cash or
investments resulting from the transaction immediately after closing
until our client puts the assets under management with another firm or with
in-house team.
