UniCredit Bank’s major advantages are: political neutrality, independence from any financial or industrial group, absence of own interest in acquisition of any industrial asset and non-participation policy in any hostile takeover.
Corporate Finance Department can arrange funding for large size deals.
Corporate Finance Department provides the following services:
- Merger & Acquisition
- M&A Funding
- Private Placement
- Offer to Strategic Investor
- Other Consulting Services
Merger & Acquisition
UniCredit Bank’s Corporate Finance Department provides Merger & Acquisition consulting services.
For instance, if there is an acquisition of a company (or part of its business), we are ready to offer you the following:
- Target industry, market and market segments research, overview of key players and their strategies
- Identification of selection criteria (for M&A), identification of Target (for M&A)
- Development of acquisition strategy, funding arrangement
- Preparation of the company’s financial model, valuation of the company before and after acquisition
- Estimation of future efficiency of integration, meaning not only financial consolidation but synergy from merger of two or more companies
- Reconcilement of value and deal structure with counterparties
- Preparation of required financial and legal documentation within the negotiation and deal execution frame
- Organization of Due Diligence and control over it
- Organization of deal execution (payments settlement)
M&A Funding
Additional financing may be needed for the acquirer in some M&A deals. This financing may lead to the increase of financial leverage level and result in capitalization growth of merged company. In this case, costs of debt funding should be lower than equity financing costs.
If there is a shortage of own funds, investors usually use banks’ assistance in partial financing of M&A deals through credits in order to have high yields of return on invested capitals. This type of credit has some specifics regarding credit structure and its collateral.
In M&A deals Corporate Finance Department is experienced in structuring the following deals:
- Bridge Financing — Lending collateralized by expected corporate share placement
- Leveraged Buy-Out (LBO) — acquisition of companies by investors using debt
- Management Buy-Out (MBO) — buyout of a company by management using debt (a variation of LBO)
Corporate Finance Department is open to funding other investment transactions, which conform to the Bank’s loan policy.
Private Placement
Private Placement is one of the forms companies use for funding. Normally, private placement is conducted in the form of additional share issue through private offering of shares to one or several financial investors.
This type of funding is often used by companies to finance rapid expansion, whereas opportunities for “classical funding”, i.e. bank credits, are limited due to banks’ requirements for turnover, collateral, liquidity, and other indicators. The funds generated through private placement are earmarked to finance large capital investments or for acquisition of competitors, enabling the company to become a large player in its sector in the future. Currently, the most attractive sectors for private placements in Russia are food and packaging industries, consumer goods, as well as retail trade.
As a rule, investments in such companies are made by specialized direct investment funds, which purchase at least the blocking stake in the company with a view to selling it to a strategic investor several years later. Profit is generated from the difference in the sale and purchase price.
The main private placement services provided by the Corporate Finance Department are:
- Evaluation of the company’s management efficiency, strategy and plans
- Preparation of follow-up documents to organize tenders among several investors
- Organizing Road Shows for potential investors
- Review and analysis of bids from potential investors, drafting engagement letters and exclusivity agreements with the chosen investor
- Pre-project legal and financial due diligence
- Designing regulatory and tax framework underlying the placement, as well as changing the legal structure of the company
- Agreement of the terms and volume of investments and the structure of the deal with all the parties concerned
- Arranging settlements between all the parties concerned, closure of the deal
Offer to Strategic Investor
The Corporate Finance Department offers the following services regarding attraction of strategic investors:
- Drafting medium- and long-term strategies to attract strategic investors
- Identifying the target strategic investors, reconcilement of the list of strategic investors with company shareholders
- Preparing briefs on the company’s operations for circulation among the chosen strategic investors
- Creation of long-term projected financial model, including statement on market capitalization and enterprise value
- Arranging a tender among interested strategic investors
- Selection of optimal bids from investors, signing of engagement letters and an exclusivity agreements with the chosen investor
- Organizing legal and financial due diligence
- Agreement on the structure of the deal, amending the legal structure of the company
- Drafting sale-and-purchase contracts and other additional agreements
- Settlement and closure of the deal
Other Consulting Services
The Corporate Finance Department also provides the following services:
- Consultations on corporate restructuring of a single company or a group of companies
- Assistance in settling corporate conflicts
- Advice on protection from hostile takeovers
- Legal and financial analysis of the company
- Organizing financial and legal due diligence
- Analysis of individual markets, sectors or market segments, selection of companies for mergers or acquisitions
- Preparing company briefs
- Creating projected financial models, opinions on market capitalization and enterprise value by using DCF models for strategic decision-making
- Opinions on the market capitalization and enterprise value by comparison with similar traded companies based on transactions involving the sale of similar companies
- Drafting medium- and long-term strategies for companies to attract investments
- Drafting action plans to enhance the transparency of business, corporate governance, and market capitalization of the company