The aim of a business contract is to try to provide certainty for both parties.
WHAT IS AN ACCELERATED M&A PROCESS?
In simple terms, an accelerated mergers and acquisitions (AMA) process is a transaction which takes place in a time critical situation. When acting for the sell side, accelerated merger and acquisition activity is designed to enable value to be maximised for stakeholders during a time of financial distress. The sale strategy in these scenarios is bespoke to address the unique circumstance of the business with the objective of maximising value based on the time available. This is usually driven by either the parameters of existing borrowing facilities or by pressure being applied by creditors. The timescales involved in executing an AMA process are much shorter than in a regular transaction and can often be a matter of weeks.
Transactions may include:
- sale of debt;
- acquiring new debt or equity;
- share sales;
- sale of business or assets; or
- a sale via an insolvency process
One80’s special situations team, resourced by restructuring and corporate finance experts, manage the entire process, allowing our clients to focus on running their business.
WHEN IS AN AMA PROCESS SUITABLE?
Challenging economic and market conditions coupled with financial distress can see a business’s performance deteriorate rapidly. This may lead a to loss of control for directors and shareholder, which may further drive the deterioration of both a business’s viability and ultimately its value.
An accelerated M&A process may be suitable for your business if it has:
- shortfalls in liquidity;
- deterioration in trading performance trends;
- stakeholder disputes;
- creditor pressure;
- is unable to secure additional funding from existing stakeholders;
- has a loss-making business or division and is considering its disposal;
- loss of a major customer or contract or has supply chain challenges; or
- has lost key personnel or has a challenges within the management team
HOW DOES AN AMA WORK?
These types of transactions often involve the sale of shares, business and assets or debt refinance or investments or sale and are facilitated by the use of an insolvency process.
Our sale strategies are bespoke and designed to meet the demands and unique circumstances of every business we work with, to maximise value based on time we have available to us. We use our many years of experience in undertaking AMA processes and take rapid action to protect the value in the business and mitigate any further deterioration of the position.
- liaise with creditors to optimise the client’s position;
- outline the available options, implement clear strategies and source additional funding;
- explore a potential refinancing or investment strategy;
- implement short term cash flow strategies to ease pressure;
- advise on working capital management strategies; and
- provide interim management support.
Get in touch today to find out how we manage an accelerated M&A process for you.