CORPORATE FINANCE: ADDING EXTRA VALUE TO STRATEGY & EXECUTION
he way to Wall Street is paved with studies showing that the vast majority of transactions hardly add any value – and many even destroy it. Technically, the issues relate to identifying the right targets to acquire or spin-off, trading the activity at the right price, or to the post-transaction integration/de-integration of the business. Think about it! When a company buys or sells activities, known as an M&A transaction, it is in the middle of a long, delicate, and highly complex process. It starts with an idea that becomes a strategy that defines a new business setting. As a consequence, the company may have to change focus and priorities, and this in turn may prompt a decision to acquire or divest. We recommend that the choice of M&A strategy should be sensitive to what can actually be traded subject to transformation risk and the price to be achieved. If we could remake the consulting industry around M&A transactions, would we decide to separate business consulting from corporate finance? From a client perspective, corporate finance is a critical and integrated part of the strategising and execution process, and often with conflicting interests. When we engage in transactions, it is typically in the tail end of long-lasting relations with the client organisation. Clients who trust us to engage in both strategy, execution, and transactions. Clients who believe that industry insight paves the way for quicker and more elaborate returns on their transaction investments.
hen Quartz+Co carries through transactions, the corporate finance skills are typically added to the team during the strategy work process. That enables us to review M&A options at an early stage and thus allows us to effectively assess and map the real strategic options. We build the transformation risks into valuations as well as the business case. Later, when the transaction track is launched as part of the execution, an early-stage business integration/restructuring process is prepared. We will always argue that covering the entire process makes it faster and reduces risk.
We believe that the above points-of-view are what awarded us the title of “Best European Commercial Due Diligence Advisor of 2008”. What makes us excellent at strategy and business understanding is our key skill within corporate finance, improving our ability to select the right targets, sharpen the business case, and pose critical questions when we are at the negotiation table. As such, the corporate finance skills are certainly a valuable add-on to the strategy offering of Quartz+Co. We staff teams with a combination of traditional corporate finance skills and business consultants and carefully adjust the team to meet the challenges as the project proceeds.
SUCCESSFUL AND QUICK DIVESTMENT OF A NON-CORE BUSINESS UNIT SAS Group’s new strategy, Core SAS, provides the key elements necessary to support a new competitive and streamlined SAS. Quartz+Co’s Corporate Finance team was engaged to manage the divestment process of the defined non-core business, Cubic Air Cargo – a leading air cargo provider in the Nordic region. An auction selling process with several bidders focused on an acquirer with strategic synergies and enabled a price well above initial expectations – also taking the financial conditions into consideration. “Quartz+Co added a lot of value to the process through their professional and yet straightforward way of working”, says Vice President, SAS Cargo, Jimmy Kjaersvold. The successful and quick divestment of a non-core business unit is good news for all those who need to refocus their business during the current crisis. sted and unlisted companies.