Strategy & operations

How do I assess the risks and value upsides of the business? 

Each target company brings its own unique sources of values and risks to buyers. Thorough due diligence is essential to help guide you through the investment decision making process, from assessing risks and compliance issues, evaluating financial and tax planning, to conducting business profitability review and identifying cost savings opportunities along the value chain.

Our global network and experience in even the most niche sectors means that no matter how you are looking to grow, you are working with a partner who can keep you a step ahead. We can spot the opportunities that will strengthen your capabilities and help you seamlessly navigate regulatory requirements to deliver on them through execution and integration.

For more information on Due Diligence, click here.

Am I buying a business division or subsidiary from a parent group? 

If you are planning to buy a business division or subsidiary from a parent group then you are buying a carved-out business that is most likely dependent on the parent group for providing services that are core to your operations.

There are five key questions you should be addressing:

1. What are the group services and associated costs and how will they change after the sale?
2. How do I prepare for myself for running this carved-out business on Day 1?
3. What transitional services will I need (and for how long) from the parent company to ensure I can operate this business as normal post deal close?
4. How can I optimise the carve-out entity's operating model to make the most out of the deal?
5. How do I plan to remove the dependencies with the parent group as soon as possible so I can run the business on its own?

We have carve-out experience ranging from standalone businesses, to the most complex carve-outs, across a range of sectors, advising on the sell side and buy side. We understand both vendor and buyer perspectives and their impact on value to maximise your ability to deliver deal value.

How we can help you:

• Carve-out due diligence which provide you with specific expertise in addressing the whole spectrum of operational carve-out issues (for example, estimation of target’s operating costs and headcount required to operate the business on a standalone basis and identification of key services and people required post-deal)
• Integration planning and execution by integrating your acquisition with your existing businesses and to realise the synergies you have identified in the due diligence phase

How can I financially, operationally and legally stabilise the acquired business?

One of the most common challenge buyers face upon acquiring a business is to effectively and timely take control of the newly acquired business while balancing and running their existing business portfolio. Failure to take control may result in loss of key talents and customers, disruptions to business operations, inability to track and measure business performance, non-resolution of regulatory compliance issues.

There are six key questions you should be addressing:

1. Have I clearly articulated and communicated my future vision for this acquired business to management and staff?
2. How do I set up an effective governance and risk management structure to manage business critical risks?
3. Were my due diligence assumptions made still valid given limited information available during pre-signing stage?
4. What are the operational, financial and regulatory risks inherent in my business?
5. How can I gain greater visibility into the business performance and meet my internal and external regulatory financial and operational reporting obligations?
6. What are the cultural differences between our current and the newly acquired business? How do I quickly bridge the cultural gaps to promote collaboration across both organisations?

We have supported several clients in successfully taking control of their acquisitions by tailoring and applying our proven global Taking Control methodology for each transaction. In doing so, we focus on key risks and value drivers, and help you define and execute a prioritised set of initiatives that deliver measurable benefits whilst minimise execution risks.

How we can help you:

• Establish a simple and practical governance framework by setting up right level of governance and control structure for business decision-making / approval, and aligning high-level business direction among key stakeholders
• Conduct confirmatory due diligence by identifying the potential operational, financial, regulatory and compliance issues, stopping leakage in deals and setting up mitigations
• Design and refine management reporting by understanding the gaps in the two reporting processes, designing and implementing the appropriate financial and operational reporting to monitor business performance on an on-going basis
• Transition planning by setting up a transition management office to plan and implement the Day 1 and first 100 days programs to align the differences between two companies and implement the changes in business (for example, people, culture, operations)

How do I integrate the acquired business with my other businesses to capture synergies and create value?

Integration programs are often viewed as expensive failures, but we have seen many succeed. Success or failure is closely related to the chosen integration approach in our experience. Get this right from the start of the deal process and you will significantly increase the chances of delivering the business case.

There are four key questions you should be addressing:

1. Am I focussing on the strategic, financial, and operational objectives that matter most to me and my company?
2. How and to what level will I integrate? What are the right operating models within each of my key businesses/functions and do they fit the enlarged group?
3. How do I capture the deal value and realize the synergies I have already identified?
4. Does my team have both the experience and the bandwidth to deliver a successful integration program and maintain core business performance?

We can help you address these questions by working with you to evaluate, design, plan and execute your integration strategy. We make sure the approach taken is insightful, objective, pragmatic and flexible, and that we support the entire organisation through the process from Board to payroll clerk.

How we can help you:

• Value creation and value capture opportunities by following a well defined, disciplined, and transparent approach to creating value and tracking synergies. We can help you accelerate the transition and achieve rapid integrations that fully realise desired synergies and allow them to return to a "business as usual" environment as quickly as possible after a deal
• Integration planning and implementation by converting your integration strategy into detailed actions that align people, process, and systems with your integration objectives through an effective governance structure
• Functional integration for when you require expertise on a specific function. We have a team of functional specialists responsible for integrating core functional areas and reports to individuals responsible for the overall integration
  

How do I extract greater value from portfolio of businesses whilst minimising risks to the overall portfolio?

Through acquisitions, you have accumulated a collection of investments in a range of industries and geographies, each with distinct upside potential, risk profile, operating maturity, and degree of control.

Seasoned portfolio managers, such as Private Equity firms and acquisitive corporates, are continually seeking ways to sustainably grow value that is greater than the sum of its parts through carefully considered capital allocation and active investment management.

Portfolio Management is a unique PwC offering in deals to maximise your portfolio value by undertaking a lifecycle approach (invest-grow-exit) in allocating finite capital and resources.

There are four key questions you should be addressing:

1. How do I find the right portfolio strategy that fits my company’s strategy and guides me through the changing markets and business environment?
2. What reporting framework and metrics should I use to measure and monitor my portfolio performance?
3. How do I set up an effective governance and risk management structure in managing business critical risks?
4. How do I create value in the overall portfolio and the individual portfolio companies?

PwC can assist you from initial portfolio strategy development through implementing and capturing growth value that can be confidently communicated to shareholders

How we can help you:

• Portfolio strategy development by defining and refining portfolio strategies, investment criteria and guidelines and developing detailed actionable plans to implement the strategy
• Performance Monitoring by using relevant, specific and measurable metrics with management dashboards and scorecards in aiding data-driven decision making process
• Governance and risk management by designing, stress-testing and implementing global and subsidiary portfolio governance and risk management framework, including board and supervisory roles, decision making protocols, approvals and delegations, risk and controls
• Value creation by building and prioritising value creation opportunities across the portfolio and within each individual company to maximise return on capital
  

Where are the areas of synergies and how can I realise it?

Realising synergies in the context of transactions is one of the most decisive topics deal makers need to manage. It is not only about monetising synergies; in fact, synergies usually do not just happen. Their achievement has to be planned thoroughly in advance: ideally during the pre-deal phase and definitely before signing.

There are three key questions you should be addressing:

1. How do I identify the revenue and/or cost synergies and which ones should I prioritise?
2. How will I realise the synergies and how long will it take?
3. What metrics will I measure the synergies and how will I track them?

We can assist you from initial synergy analysis early in due diligence through implementing and capturing results that can be confidently communicated to stakeholders long after the transaction closes.

How we can help you:

• Synergy assessment by performing a detailed synergy analysis in the due diligence phase; defining areas of synergies and identifying and quantifying the synergy potentials
  
  
• Capturing and tracking synergies by following a well-defined, disciplined, and transparent approach to creating value and tracking synergies