Corporate Finance

M&A is the English acronym corresponding to Mergers and Acquisitions. This type of operations are supported by Purchase and/or Sale Mandates, within the scope of which target companies are identified and potential national and/or international investors are selected, appropriate to the companies' strategic objectives.

When two companies understand that the best path for growth and expansion is for both to come together to conceive a new one, a merger happens. In practice, the two companies become one.

Acquisition is an operation characterized by the total or partial purchase of shares in one company by another, taking into account that the acquiring organization holds more than 50% of the capital and starts to control management decisions.

The reasons for the occurrence of this type of operations tend to be strategic and/or financial.

Among the strategic reasons, we highlight as an example the objective of diversifying the company's products or market, internationalization or consolidation of presence in the current market.

At the same time, regarding financial reasons, we highlight the objective of increasing the company's revenue and profits, or even obtaining access to new financing or lower interest rates.

Valuing a business is a process that aims to help define the fair value of the company. The value defined by this assessment is what will be considered in processes of buying and/or selling companies, raising capital and in merger or spin-off operations.

Discover the 3 different perspectives that are usually used in the process of evaluating a company  https://www.yunitconsulting.pt/pt/conhecimento/blog/avaliacao-de-empresas-porque-e-relevante/654/

The value of a company or business depends on many factors, namely the continuity scenario and macro and microeconomic assumptions. Historical performance, trends in the sector of activity, resources and internal competences as well as the client portfolio and geographic distribution are some of the factors that influence the value of a company.

Learn more about how companies are evaluated https://www.yunitconsulting.pt/pt/conhecimento/blog/fusoes-e-aquisicoes-sabe-determinar-o-valor-da-sua-empresa/1046/

Any decision taken to improve the productivity or competitiveness of a business must consider its value. A business valuation should be carried out periodically to update values, following market trends and changes in the company. You never know when an opportunity for growth may arise, whether through the entry of investors into the company's capital, or a process of mergers and acquisitions!

PMI is the English acronym for Post Merger Integration. The PMI team works in relation to the post-merger integration process, with the aim of harmonizing operations and managing the organizational and cultural differences of the companies involved in the transaction.

It is a fundamental element of the operation to ensure that the expected results and benefits are achieved. Improper implementation of post-merger integration can lead to wasted opportunities, internal conflicts and even transaction failure.

Due Diligence is normally a demanding process where a potential buyer hires an independent entity to assess, in detail, the financial strength and potential of a business they intend to acquire, to ensure that they will make a good purchase. It is an essential and important process of reviewing the information provided by a company that is in the process of being sold, by the potential buyer, before making the purchase with the aim of validating and/or confirming the financial data, income and expenses, contracts with customers and suppliers and other relevant aspects of the business.

Although the Due Diligence process is normally carried out by the buyer, there has been an increase in the practice of due diligence carried out by the seller, vendor due diligence (VDD).

SPA, from English Shares Purchase Agreement/ Stock Purchase Agreement.

As the title reveals, this instrument is a purchase and sale contract. However, due to the object of the operation – quotas or shares issued by legal entities – the SPA contains some specificities, since the shares or quotas of a company are transacted here, a dynamic and constantly changing “entity”.

Therefore, the seller and the buyer generally establish in greater detail the quality of the asset being transferred, the responsibility of each party regarding the liabilities and assets of the target company and the mechanism for resolving any disputes arising from the contract, among others. .

An NDA, Non Disclosure Agreement is a contract that provides for the confidentiality of information shared between the parties. It is a very important document in the context of buying and selling companies as it establishes the conditions for the exchange of confidential information between the parties, stipulating the use that can be made of this information, who has access to it and what the consequences are. in case of violation.