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#Corporate Finance #Takeover #Mergers & Acquisitions

Worldwide local strength in acquisitions

Friday 30/04/2021
Wereldwijd lokaal sterk staan bij overnames

In order to bring the search for the most suitable buyer for a medium-sized Belgian company to an optimum conclusion, an international perspective is required.

That perspective is only valuable in conjunction with a solid footing - read: knowledge and decisiveness - in the local market of both the seller and the buyer, anywhere in the world. The same applies by definition to Belgian companies seeking international expansion.

It sounds contradictory, but for successful international business acquisitions in corporate finance the following adage applies: a local foothold gives you wings. To know what the managers, the business owners or the family shareholders on both sides of the negotiating table really want; to know which solutions are the right ones for the strategic choices that are made; to make a strong SWOT analysis of the business; to... the corporate finance adviser must not only speak the language of each party, but must also have a good understanding of the (micro) cosmos in which each company involved conducts its business, in any country.

Google and desk research may be able to give a first picture of international prospective buyers or other interested parties, but there is still a wide gap between that type of 'knowing' and real knowledge. To bridge that gap, a corporate finance adviser must be able to engage the right parties worldwide, trusted and knowledgeable partners who know who the potential buyers are in the relevant markets and, moreover, who also know how to make contact with them in the right way. Local customs and practices are not universal - what is common practice in Belgium is not common practice in India. If you can't make a connection, you can't do business, let alone bring a business acquisition or expansion to a successful conclusion.

Once contact has been established, a 'deal' has to be made. Again, it is essential to understand how business is done locally and in what frame of reference the counterparty thinks and assesses risks and opportunities. As Moore Corporate Finance always wants to go for a sustainable transaction, the same applies to a good understanding of expectations on both sides of the table. This also reduces the risk of broken dreams and problems after the transaction has closed. You don't just want to close the deal; you want to shape a successful future.

Last but not least, there is also a different legal and tax framework on either side of the line. Multidisciplinary teams are not only necessary because of the different perspectives, but also because of the differences across borders. Truly a challenge that few can meet.

Integrated service across countries

Even during the acquisition process, corporate finance must continue to painstakingly perform the bridging function between the local and the global in order to provide an integrated service across countries. This requires more than the sum total of the services of a corporate finance boutique in both countries. Even more than a network, it is real teamwork across national borders. Translating the insights of the local experts into the jargon, the conceptual framework and the world of the local parties - and thus using their 'language' to respond to their strategic objectives and expectations - requires tight control. Only then, despite the differences, can a common trust grow in which a successful agreement with added value for all parties is possible.

 

Moore Corporate Finance is able to bridge the gap between a strong local presence and global execution power, thanks to the integrated network of experts worldwide within Moore Global Corporate Finance.

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Philippe Craninx

Philippe Craninx

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David Valenne

David Valenne

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