Problem Statement

Our client was a milkshake chain with a well-established brand image in the market over several years. However, despite such a strong market presence, the company was facing the intricacies associated with Mergers and Acquisitions (M&A). In a highly competitive food and beverages market, M&A activity can contribute to growth, but it requires in-depth understanding of financial plans, risk handling, and market forces. While the milkshake chain succeeded in the mainline business operations, it lacked the in-house financial knowledge to handle such situations. Such a lack of financial knowledge hampered the decision-making process during the time the company was considering possible acquisitions, strategic alliances, or even the financial soundness of the target firms. The sector is dominated by market consolidation, and hence, knowing how to assess synergies, valuation, and integration costs is important for securing favorable deals.

TAG’s Actions 

• We carried out an extensive and structured due diligence process for our client, which entailed a detailed evaluation of possible acquisition targets.
• We started by performing a comprehensive financial analysis that analyzed the historical and projected financial performance of each target company.
• We dedicated ourselves to developing comprehensive forward-looking financial models to facilitate strategic decisions regarding future acquisitions. Some of the major models that were integrated into these were pro forma statements like pro forma income statements, balance sheets, and cash flow statements projecting the financial condition of the company in the context of anticipated effects like higher revenues, cost benefits from synergies, and additional liabilities and comprehensive valuation analysis that included methods like discounted cash flow (DCF) analysis, market comps, and precedent transactions to approximate the intrinsic value of the target companies. 
• Also, creation of a multi-dimensional post-merger integration (PMI) strategy would facilitate smooth merging of the two companies with the assurance that risks are identified and managed. 
• We determined regions of operation synergies, eliminated redundancy, and streamlined processes. We considered systems, processes, and teams from an efficiency and minimization of disruption of current workstandards point of view.
• We standardized financial reporting and controls to ensure the bookkeeping of both entities would appear similar. This involves analyzing accounting processes, consolidating financial position and performance statements, and harmonizing budgeting and forecasting processes.
  

The Benefits 

• By conducting detailed due diligence, Our strategy aimed at targeting high-value acquisition candidates that would fit with the client‘s current capabilities and market footprint. This involved analyzing synergies in operational, cultural, and strategic aspects to enable smooth integration after acquisition. 
• Using our market analysis and financial modeling, we were able to provide them with actionable insights, which they can utilize in their decision-making process. The bottom line was phenomenal: a 30% growth in consolidated revenue due to the onboarding of acquisitions that were actually high performers as well as effective resource allocation.
• The client also increased their market share by 15% through strengthened brand positioning and an enhanced portfolio of offerings, ensuring a robust competitive position. We played a key role in developing and executing comprehensive financial models that constituted the core of data-driven decision-making. These models thoroughly examined financial performance metrics, predictive scenarios, and risk factors, giving a clear, complete picture of each acquisition’s impact on the client’s master growth strategy.
• By tying the quantitatives to strategic aims, we were able to enable the client to evaluate synergies, monetize value creation, and maximize resource allocation for each transaction. Our work brought clarity and confidence, ensuring that each acquisition fit perfectly into the client’s long-term vision and business path.
• The post-merger integration strategy outlined a strategic blueprint for seamless integration of the operations, systems, and cultures of the combining entities. This would involve meticulous planning and implementation on all fronts that align organizational structures, synergize workflows, and join technology platforms.
• Periodic reporting was among the principal activities during the process, reporting regularly on the key performance indicators, integration milestones, and the financial performance metrics.