M&A strategy formulation

Target Identification

We determine the acquisition target based on our client’s development strategy and market demand. Our screening analysis considers factors such as the target company’s industry position, market share, financial performance, and technological strength to meet our client’s strategic needs.

We look into various types of acquisitions, including horizontal acquisitions (to expand market share and enhance competitiveness), vertical acquisitions (to integrate the supply chain and reduce costs), or conglomerate acquisitions (to diversify operations and disperse risks).

Valuation

We use various methods to evaluate the target company’s value, such as the income approach (discounted cash flow analysis), the market approach (comparable company analysis and comparable transaction analysis), as well as the asset-based approach.

Our valuation process considers the target’s future growth potential and possible synergies to

Risk Assessment

We analyze and mitigate potential financial, legal, operational, and integration risks throughout the M&A process to reduce the overall risk of the acquisition for our clients.

determine a reasonable price range for the acquisition.

 

due diligence

Financial Due Diligence

We examine the target company’s financial statements, including balance sheets, income statements, cash flow statements, and other important financial documents to verify the authenticity and accuracy of the reported financial data.

Using these data, we analyze the company’s financial status (such as asset quality, debt level, profitability, cash flows, etc.) and evaluate risks (such as default risks, taxation risks, and accounting policy risks).

Legal Due Diligence

We review the target company’s legal documents, such as articles of association, business contracts, litigation documents, etc., to ensure the legality and compliance of the company.

We research target company’s existing litigations and its potential legal risks, such as property rights disputes, contract disputes, labor disputes, etc.. We also analyze changes in the legal environment (such as regulatory policies, amendments to laws, etc.) to create a holistic view of its exposure to legal scrutiny.

Operational Due Diligence

It is important for us to understand the business operational model of the target company to determine its growth prospects.

We study the target company’s supply chain, sales channels, and customer groups to evaluate the company’s operating efficiency and its market competitiveness.

We also investigate the target company’s management team, technical talents, and corporate culture to evaluate its ability to grow in a sustainable manner.

Transaction structure design

 Selection of Acquisition Method

We analyze the advantages and disadvantages of different acquisition methods (equity acquisition, asset acquisition, merger, etc.) and select the most appropriate path for our clients.

Selection of Payment Structure

We gauge the impact of different payment structures (cash, equity, debt, etc.) for the transaction and advise our clients on the most suitable approach.

Design of Financing Plan

We leverage our strong connections with financial institutions to formulate financing plans based on the cost of each method of financing, such as bank loans, bond issuance, equity financing, and more.

Negotiation and contract signing

Negotiation strategy formulation

We define clear negotiation objectives and bottom lines and develop corresponding strategies and tactics.

We assemble a dedicated negotiation team comprising professionals from key disciplines such as finance, law, and business development.

Contract Terms Negotiation

We negotiate all critical terms of the merger and acquisition (M&A) agreement, including the transaction price, payment method, closing conditions, representations and warranties, and liability for breach of contract.

We also ensure the final contract terms align with the company’s strategic interests and requirements, thereby protecting its legal rights.

Signing and Closing

Upon reaching a final agreement, we help formally execute the M&A contract according to the conditions and timeline specified in the agreement.

Integration and management

Strategic Integration

We assist clients in formulating a comprehensive development strategy for the integrated enterprise, clarifying its strategic direction and objectives.
We integrate business resources, optimize the operational structure, and enhance overall market competitiveness.

Organizational Integration

We realign the organizational structure and optimize management processes to increase operational efficiency.

We integrate human resources by rationalizing personnel placement to motivate employees and stimulate their creativity.

Cultural Integration

We analyze cultural differences and develop a targeted cultural integration plan.

We actively promote cultural harmony post-acquisition to strengthen corporate cohesion and foster a unified identity.

Financial Integration

We integrate financial systems, unifying accounting policies and financial management processes.

We optimize capital management structures to improve capital allocation and utilization efficiency.

Risk Management

We identify integration-related risks and develop corresponding mitigation measures.

We continuously monitor and evaluate the integration process, making timely adjustments to the strategy as needed.