Our services include:
- Management Turnarounds and Restructuring of Businesses
- Mergers, Acquisitions and Sale of Businesses
- Maximising Business Values
- Adviser to Boards of Directors
- Business Risk Analysis
- Strategic Planning
- Management and Employee Buy-Outs (MBOs/EBOs)
- Shareholder Disagreements
- Advising Overseas Investors in Australia
Management Turnarounds and Restructuring of Businesses
When a business is not achieving its long or short-term aims and this situation is unlikely to be rectified in a reasonable time, the whole business may need to be re-assessed and operationally restructured.
Pacific Capital has had great success in coming into complex and sometimes confused business situations, working with senior staff to evaluate the commercial business opportunities and carrying through the commercial restructuring.
Pacific Capital are foundation members of the Business Turnaround Association a non profit group to promote the benefits of management turnarounds to governments and the business community.
Mergers, Acquisitions and Sale of Businesses
Clients often request advice on the purchase, sale or merging of a business. In regard to purchase or merging, care has to be paid to important issues including: industry outlook; the business's competitive advantages; financial performance; management; marketing; environmental and legal issues, and commercial due diligence. The type of corporate advice often required is strategic, operational and negotiating.
The sale of a business primarily involves: a strategic assessment of the industry and likely purchaser; maximising or optimising the business value, and providing negotiating advice.
Maximising Business Values
Pacific Capital has a successful track record in maximising business values
in connection with restructuring, preparing businesses for sale and as a part of
a periodic review of a business.
In undertaking assignments to optimise or maximise the capital value of a
business, Pacific Capital pays particular attention to the following:
- understanding the industry and where the business fits into the industry;
- dentifying and developing competitive advantages;
- identifying the Critical Success Factors;
- ensuring staff are truly customer-focused;
- developing a clear and effective management structure;
- maximising business cash flows;
- deciding who would be the logical or best purchaser of the business and why;
- pricing and value considerations.
Adviser to Boards of Directors
Pacific Capital has had extensive experience in providing directorships to listed and unlisted companies. Often the nature of the advice required by growing private companies is on-going and Pacific Capital has found that taking on the role as Adviser to the Board is an alternative and is often the most economical way of assisting the client.
An example of this is when companies wish to prepare themselves for an equity or debt raising and have to amend their structure to attract the best proposals. This can often be most economically performed (perhaps over a 6 month period) by the existing directors and management, with the help and guidance of an experienced corporate adviser such as Pacific Capital
Business Risk Analysis
As an essential part of operating procedures, a business should periodically conduct a business risk analysis.
This analysis should cover the effect of risks, such as:
- the death or departure of key staff;
- the loss of intellectual property;
- new technology making existing products obsolete;
- shareholders or financiers withdrawing support;
- sudden explosion of bad debts;
- largest customer defecting;
- critical supplier ceasing business;
Pacific Capital can advise a business how to assess its risks and prepare a documented plan to deal with these.
Strategic Planning
In today's highly competitive business environment it is more important than ever for business operators to clearly identify their long-term aims and objectives. Once this is done, short-term opportunities can be examined knowing that they fit the longer term objectives. This is particularly important in e-commerce, where many opportunities have not been fully developed.
Pacific Capital believes that the essence of strategic planning is to identify the sustainable competitive advantages, both in the short and long term. Overall industry and segment analysis then has to be undertaken to identify market trends, the firm's position in the industry and how value can best be created in the business.
In addition, an SME should have a system of competitor intelligence in place so that it is able to properly compare its competitive advantages. In particular what exactly are its advantages in terms of uniqueness, quality, service and/or price?
Management and Employee Buy-Outs (MBOs/EBOs)
MBOs and EBOs are increasingly considered a good option when a business is to be sold. The reasons for this could include the staff being in the best position to assess the business value and staff wishing to hold a strategic shareholding as a condition of their continued employment. A major obstacle to MBOs has been the lack of available capital from staff. However, with the development of a broader venture capital market there is more capital available for such investments. Pacific Capital can offer the following advice and services, tailored to the stage where it becomes involved.
- testing whether an asset or business activity is appropriate to be prepared for sale. Pacific Capital can advise the specific commercial factors to be taken into account and the relative weights of each factor
- where there is an in-principle decision to sell an asset or business activity, Pacific Capital can advise on the relative merits of the options for disposal, for example, straight sale of assets, trade sale, or management/employee buy-out (MBO/EBO)
- if there is a disposition, or an in-principle decision to consider a stand-alone MBO sale, Pacific Capital can work with the MBO personnel to evaluate the business opportunities and then structure the MBO business and financial arrangements to provide the best chance of commercialisation
- alternatively, it may be considered that the MBO group should join with an industry leader to form a joint venture so that the MBO is helped with commercial management, marketing and finance. This MBO/industry joint-venture may be very attractive to prospective investors and clients
Shareholder Disagreements
Many SMEs are in effect a partnership and, as with all partners, difficulties can arise with different work styles, expectations not eventuating and personal issues.
Pacific Capital has assisted partner shareholders by acting as "chairman" of board meetings to ensure that discussions remain focused on the real business issues. It also acts as a co-ordinator to get the partners moving forward in a productive manner.
Advising Overseas Investors in Australia
Pacific Capital has acted for overseas groups in Australia carrying out initial investigations, the purchase and the subsequent monitoring and sale of investments.
The Australian commercial investment and legal system is not dissimilar to those of the U.S. and U.K. Accordingly, if an overseas investor wishes to make an investment, it is generally not difficult to complete satisfactory documentation.
