A successful and secure acquisition of a company:
Many skills, one goal

Buying a company means investments worth millions, an intensive search for exactly the right company and a large investment of time. It starts with the search, continues with intensive negotiations, and ends with integration. In other words, everything has to fit, no ifs, ands or buts. After all, such an important process doesn't happen every day. How do you ensure success? Because there are many questions associated with the acquisition of a company:

What is the right company?

What is a fair price?

How do you avoid financial, legal or tax risks?

This is exactly what our specialists are here to help you with. Unlike brokers, agents or platforms we find the puzzle piece for you that fits exactly. We support you throughout the entire acquisition process. This gives you the freedom to continue to focus on the operational business of your company as intensively as before. We offer professional project management and extensive experience as company succession is our day-to-day business.

Our consultants convince, mediate and accompany:

All our experience flows into your company purchase

We are advisors who know how to convince with a lot of experience but also how to mediate in case of conflicts. Our consultants can also push critical issues at many points in the process without these having a negative impact on the transaction. In addition, as the principal, you can intervene at critical points in the process at any time. The goal of this approach is to de-emotionalise the company acquisition. And quite independently, we place our entire, highly experienced network at your disposal during the process:

• Tax consultants
• Auditors
• M&A lawyers
• Data room provider

At the beginning there is the question: What goals do you want to achieve with the acquisition of a company? For example, if you want to enter a new market we will look for companies that are already successful in this market. Or do you want to expand your product line? Then we will introduce you to exactly those companies that offer complementary products.

In other words, it's not just any company we introduce to you but the missing piece of the puzzle you wish.

Attractive companies are not only contacted by you but constantly by a large number of prospective buyers. Therefore, it is even more important to gain the trust and interest of the seller.

The first impression is decisive - as so often in life. And regularly it is the details that make the difference:

• Did you proactively provide a confidentiality agreement at the beginning?
• Do you present your company with a high-quality and transparent company presentation?
• Do you adequately demonstrate the advantages of a joint future?
• Are you prepared to provide a detailed indicative offer?

Details like these will make the difference. They show the seriousness that a seller expects! Taurus Advisory does not just watch. We actively accompany you, starting with a good confidentiality agreement, through the custom-fit company presentation, to the first personal meeting with the desired company.

The valuation: What purchase price is appropriate for the acquisition of a company?

The valuation of a company is complex. There are many factors that influence the value of a company. These include:

• the attractiveness of the product or service
• the financial situation
• the (sales) size
• the future growth potential

However, there is hardly a 100% result even when taking these points into account, since individual factors such as a strategic premium, synergies, multiple arbitrage, or other issues must also be considered and evaluated. But one thing is important to know for a company acquisition in the medium-sized sector: it is not the tax value or standardized valuation procedures such as IDW S1 that are ultimately of interest but the price that is currently being paid on the market.

From our hundreds of transactions we know how to give you a secure feeling of a fair and realistic purchase price

We value your target company using professional, market-based valuation methods such as the multiple or discounted cash flow method. However, other valuation methods such as an LBO model can also be useful. The correct valuation and the presentation of this company value in the indicative and binding offer is a point that should not be underestimated when building trust with the seller. It helps to always discuss and negotiate with the seller at eye level.

The valuation of a company is complex. There are many factors that influence the value of a company. These include:

• the attractiveness of the product or service
• the financial situation
• the (sales) size
• the future growth potential

However, there is hardly a 100% result even when taking these points into account, since individual factors such as a strategic premium, synergies, multiple arbitrage, or other issues must also be considered and evaluated. But one thing is important to know for a company acquisition in the medium-sized sector: it is not the tax value or standardized valuation procedures such as IDW S1 that are ultimately of interest but the price that is currently being paid on the market.

From our hundreds of transactions we know how to give you a secure feeling of a fair and realistic purchase price

We value your target company using professional, market-based valuation methods such as the multiple or discounted cash flow method. However, other valuation methods such as an LBO model can also be useful. The correct valuation and the presentation of this company value in the indicative and binding offer is a point that should not be underestimated when building trust with the seller. It helps to always discuss and negotiate with the seller at eye level.

• Full exclusivity means that the seller will only talk to you, the potential buyer, from the moment the agreement is signed. As a rule, this exclusivity is limited in time so that the seller can be sure that the process will not be protracted.
• Negotiation exclusivity means that the SPA negotiation is only carried out with you and not parallel with other interested parties.
• Closing exclusivity means that you get a pre-emptive right, provided that you jointly positively conclude the contract negotiation.

In a structured bidding competition or auction process you generally have no opportunity to agree on exclusivity on the buyer side. Nevertheless, we do everything we can to maximize your chances. This includes not only a professional company valuation in line with the market. Above all, we support you in submitting an indicative offer which is regularly requested by the seller or his advisor. The submission of an indicative purchase offer is not only an integral part of any bidding process but also a very central document to "stay in the game" as a prospective buyer.

We know very well which contents an LOI must have and which are convincing

These can be: disclosing of the enterprise value, the equity bridge, the required working capital or even topics such as an earn out, a vendor loan or a reinvestment. Together with you we prepare a high-quality indicative offer. In this way, we give the seller or seller's advisor the feeling that your purchase offer is not one of many and that we, and you in particular, fully stand behind an acquisition - naturally on suitable terms.

The DACH region is our home market - and the so called Mittelstand is where Taurus Advisory is at home. We have unique market knowledge, a well-maintained network of hundreds of entrepreneurs from the German mid-market sector and excellent contacts to large, even multi-national companies. We also maintain intensive relationships with more than 600 national and international financial investors, whose investment focus we know very well. This helps us to identify interesting target companies accurately. In this way, we come into discreet contact with shareholders and build up prospects for potential company acquisitions. Because we are deeply rooted in the German mid-market sector, we can approach potential acquisition candidates in a very high-quality and individual manner. In doing so, we always focus on facilitating a trusting and cooperative relationship with potential partners and maximizing the chances of a successful company acquisition.

The due diligence experts are working on these topics every single day. Of course, at conditions suitable for medium-sized companies and without any remuneration for us because kickbacks are a no-go for us! Our task during the due diligence is to operate a professional data room management for you and to be available as coordinator to all auditors.

The market for company acquisitions has turned from a seller's market to a buyer's market in 2022. Many buyers have had to wait a very long time for this kind of market environment. There are many reasons for this, just 3 examples:

• Supply chains are still fragile
• Russia will be absent as a trading partner for a long time
• Some raw materials have become massively more expensive

The consequences are inflation and, in some cases, a strong reluctance on the part of banks to provide leveraged buy outs. In addition to traditional bank financing, other financing parameters have therefore been playing an increasing role since 2022.

• Earn outs are purchase price components that are only paid out after the acquisition of the company on the basis of previously defined parameters. An example is a minimum EBITDA in the year of the transaction, minimum sales or other underlying values. This instrument reduces the purchase price to be paid at closing by the amount of the earn out.
• Vendor loans, in which the seller provides the buyer with a part of the purchase price as a loan, are also very popular.
• A reinvestment (minority) by the former shareholder can also be a "financing module" for you. You acquire a majority stake in a company, but do not have to pay 100% of the purchase price on the closing day, but correspondingly less. Another effect is that you can be sure of the commitment of the former shareholder. A real asset in a company acquisition.

Let's talk about possible financing ideas. Together we will work out a perfect solution for you.