Callisto provides management teams of a company undergoing a buy-out with :
- Technical support
- Negotiation capacity
At the different stages of the transaction process :
- At the very early stages, ahead of the launch of the process
- During the negotiations of the Buy-Out main parameters
- Throughout the life of the Buy-Out, particularly in the case of large acquisitions (requiring additional equity), in financial restructuring situations or at the exit of the buy-out
To ensure the success of a leveraged buy-out, management must be able to rely on professional, experienced and independent advice, free from any conflict of interest in order to :
- Properly integrate the challenges and constraints of a Buy-Out
- Optimize its own financial and statutory position
Callisto provides support and advice to management teams in order to protect their interests at every step leading to the closing of the transaction.
The buy-out from management’s perspective
The process and negotiation leading to Buy-Out transactions are real challenges for management teams. It requires the assistance of professional financial advisers.
For a primary buy-out, management team has to become familiar with a large number of new parameters over a very short period of time :
- Interaction with a new type of shareholders: committed and professional shareholders with highly demanding requirements
- Change of status: a manager becomes a shareholder
- Sophistication of financial and legal engineering
- Shift of focus from a net income culture to a cash culture
- Increased interaction with lending banks (negotiations, demanding reporting requirement)
- Change in the time frame: the average duration of a buy-out is approximately 5 years
In the case of a secondary Buy-Out, management teams will have to check calculation of the exit proceeds, as well as negotiate the conditions of its reinvestment alongside the new shareholder.
Even though they have previous Buy-Out experience, they will have to cope with a new environment and a different management package.
In a secondary Buy-Out, management teams may have gained enough legitimacy to influence the selection of their future financial investor. In that context, Callisto will perform a profiling of the different funds in accordance to the culture and the strategy of the company.
Irrespective of secondary vs. primary Buy-Out, management teams must cope with considerable additional workload during the negotiation period, which leaves them with very little time to take care of its own interests.
Indeed management teams have to deal with several priority tasks at the same time:
- Day-to-day management of the company
- Active role in the disposal process in the best interests of its shareholder(s)
- Protection of the fundamental interests of the company and its employees
- Optimisation of management’s financial interest