MERGER & ACQUISITION ADVISORY

Overview
Pre-IPO and IPO Advisory
10 Tips to Consider
Pros and Cons

Overview

East Plate helps you to monetise and maximise the value of your business. It’s our specialty, working with SME and business owners to understand their business, building the value and monetise at the best value. We recognize that SME have specific needs and may only monetise their business once in a lifetime so it needs to be right and for the best value with the least risks and the highest level of confidentiality.

It can be daunting for business owners to face large groups or private equity buyers with access to pools of specialists, advisors and lawyers, but not to worry, we’ve helped quite a number of business owners to monetise their business and we will guide you throughout the process.

We offer a full range of services for the entire monetisation process and any specific assistance required by business owners. We strongly recommend  you to start the preparation as early as possible as opportunities are reserved for those who are prepared earlier, and always have in mind the possibility to monetise and which type of buyer would find the best value in your business.

1 Pre-transactional planning and designing of M&A proposition to target buyer/seller.
2 Identifying and realising the realism and do ability of wish-lists and planned sacrifices to enable strategic negotiations.
3 Vital economic, operational, legal and fiduciary considerations affecting ultimate M&A objectives.
4 Vital economic, operational, legal and fiduciary considerations affecting ultimate M&A objectives.
5 Equity restructuring and voting rights, financing and purchase options, management control & compensation, and residual liabilities.
6 Acting as a neutral advisor to ensure transparency and proper procedural execution or exclusively representing either the buyer/seller to craft strategic M&A processes.

Pre-IPO and IPO Advisory

Are you ready for growth and fund raising?

After you have survived start-up and built successful businesses, you may be wondering how to take to the next step and grow your business beyond its current level. For further growth to materialise, there must be a concrete business plan to take the organisation to the next level, and this would likely involve additional capital to fund expansion plans or to grow via merger and acquisition.

Are you ready for growth? What do you need to raise capital? At all stages of the pre-IPO preparation process, East Plate assists companies to meet the expectations of investors. We introduce corporate governance best practices and help you meet the financial reporting requirements of your chosen exchange.

East Plate provides dedicated services towards an IPO and the foundation that must be created to transition a private company into a public company.

1 Holistic planning and preparation of a company for public listing on suitable stock exchanges in Malaysia by considering the quantitative and qualitative requirements as stipulated by the targeted stock exchanges and current market sentiments.
2 Examine and conduct necessary improvements on existing operational, financial performance and equity structure which include the modification of existing corporate governance, cleansing and adjustments on financial transactions, making changes to the organisational and equity structure, and implementation of critical processes to enable gradual transition toward mandatory listing compliant-behaviours.
3 Identify suitable stock exchange that meets the listing objectives of the company, such as considerations relating to costs of listing, pre-IPO funding, duration of the listing, liquidity of the market, and listing requirements stipulated by the regulators.

10 Tips to Consider Before Buying a Business

 

1

Setting Goals

  • Set clear and realistic goals, you must be specific on what you want and must be realistic.
  • Clear visions will help improve decision making related to planning, and managing the purchased business.
2

Choose The Right Industry

  • Choose businesses that you are familiar with (work before/ related to your current job or business)
  • Do not simply choose an industry based on feelings and dreams.
3

Do Research

  • Collect & analyses data (customer surveys, hire professional consultant)
  • Survey on the industry competitors
  • Research about market, cost, geographical location, capital required, team, and system.
4

Get into the business after proper planning

  • Stay subjective (Don’t be emotional, have to be based on data and facts)
  • If possible hire a team of experience people (People is a great asset to the company)
5

Do a Reality Check Before Execution

  • Take a step back & think. (Use SWOT)
    Strengths, Weaknesses, Opportunities, Threats
  • Ensure to have a cross check between the previous business team and your team on the business operation, regulation and accounts.
6

Get Help

  • Better spend to get help from experts than facing problems after a period later.
  • New people can provide new perspectives.
  • Do not have ego. (You do not know everything)
7

Manage Money Well

  • Set a budget.
  • Ensure to have good credit ratings before financing a business.
  • Have entry & exit plan.
8

Make an Offer

  • Communicate with a trustable solicitor.
  • Give an initial offer & follow up.
  • Ask for condition of sale.
  • Set fixed period for the handover.
9

Negotiate to Obtain Great Deals

  • Negotiate and provide counteroffers.
  • Use leverage to negotiate (Cash is King)
  • Provide some benefits to seller (Give some equities)
10

Buy The Business

  • Do a due diligence with the solicitor to verify the information given by the seller.
  • Perform a due diligent on the company debt and any litigation.
  • Congratulation! You own the business now.

What Are the Pros and Cons of Buying an Existing Business

 Pros of Buying an Existing Business

 

1

Have access to existing customer base

  • Can promote new products and ideas through an existing and trusted brand.
  • Able to create fast sales by targeting existing customer base.
  • Easier to make profit compare to start-up due to strong branding and loyal customers.
2

Have good existing distribution channels

  • Existing business may already have a good distribution strategy, distribution partners, and infrastructures.
  • Distribution is difficult for new businesses due to lack of resources.
3

Complete business model

  • Businesses operating more than 5 years have stable and reliable business model.
  • Easier to run the business with existing system structure.
4

Effective & reliable business practices have already been implemented

  • Policies and procedures are already standardized to ensure operation runs smoothly.
  • Avoid cumbersome to process implementation of new policies and procedures as it can take a long time.
5

Gain access to company’s existing assets

  • Utilizing existing warehouse to store products and infrastructure such as machines to speed up production.
  • Have stronger credit history and collateral options which increases the chance for securing financing loans for future business opportunities.
6

Emphasize on the business growth

  • Focus on business gaps to make improvements and expanding the business.
  • Do not need to worry about the survivability of the business.
7

Have experienced employees

  • Exclude training cost which reduces expenses.
  • New business requires to provide training to their employees.

Cons of Buying an Existing Business

 

1

High costs can still occur

  • Purchasing existing business is costly due to real estate and legal fees.
  • Requires having cash and good credit history.
2

Requires expertise & experience to excel in the industry

  • Need to be knowledgeable and familiar with all the business process and operations.
  • Need to have good strategy plans.
  • Need to manage cashflow and risks well.
3

Existing customer base may not be reliable

  • Customers build bonds with people and brands simultaneously.
  • Customer may trust the brand but do not trust the new business owner.
  • Sales might be affected.
4

Establishing trust takes time

  • Existing employees may not be happy due to new ownership.
  • May not be cooperative to show dissatisfaction.
  • Results in lower productivity and disrupt trust between employees and company.
5

Reduces originality

  • Purchasing existing business is not considered as creative and innovative.
6

New ideas might be rejected

  • New ideas presented might be rejected by customers and employees.
  • This aspect still presents the same risk as entrepreneurs in establishing new business ideas during a start-up.
7

Consequences of taxation

  • The tax of a business can varies due to number of inventories, business structures, and expenses.
  • There may be liabilities transfer from previous business owner.
8

Existing policies may not match with new ideas

  • Existing business policies might not align with the new ideas.
  • Introducing new policies is hard due to difficulty to obtain agreement from every employee.
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