M&A and Divestitures
Perform your due diligence and get the best of two worlds
Your organization (Acquirer), which has grown rapidly in recent years by acquiring several smaller companies (Target Companies), is faced with complete chaos in terms of acquired IT systems and working methods. Over time, your management has noticed that the organisation has become inefficient and unclear: duplicate digital IT structures, overlapping software, complex operational management and overly expensive IT contract acquisitions have emerged.
Another company (Seller) that decides to sell one of its less profitable subsidiaries (divestiture) to another company (Buyer) faces another complex process: financial data must be split up, IT systems must be separated, contracts must be reviewed and divided, and staff may need to be transferred. Without a structured approach, there is a risk of chaos, delays and loss of value.
Compare and improve
A Merger and Acquisition, or a Divestiture, can be an opportunity for organisations to improve their IT expenditure or their contractual conditions, by comparing the T&Cs of target company with your own contractual conditions.
How does PACT support your M&A/Divestiture initiatives?
Our legal and Procurement experts ensure you that the M&A (Mergers & Acquisitions) and Divestitures activity proceeds in a structured manner. Our Clients seek support from our specialists to provide strategic, legal and operational guidance on mergers, acquisitions and divestitures.
Our M&A advice supports you in:
- Conducting thorough due diligence to identify financial, legal and IT risks.
- Identifying cost savings and synergies (e.g. by eliminating duplicate functions or software).
- Define the strategy (assume the contract, terminate & replace the contract, or reject the contract).
- In the case of a divestiture, we work with you to clearly map out the resources, contracts and employees involved in the sale, so that the transition runs smoothly and the value of the divested part is retained.
Results after performing a structured M&A or Devestiture plan
In an M&A, a full commercial and risk analysis (Due Diligence) is carried out, in which all contracts are mapped out. New contractual and commercial terms and conditions (of the acquired company) are compared with the terms and conditions in contracts of the Acquirer's existing suppliers. This allows the best of both worlds to be discovered, and a decision to be made to adopt the new supplier terms and conditions of the Targeted Company in the Acquirer’s organization. If the contractual and commercial terms and conditions are worse, the contract can be refused and even terminated as part of the M&A.
In the event of a sale of parts of your company, it is important to properly identify the assets and make clear agreements with incumbent suppliers about which assets and contracts will be transferred and which services and products will continue to exist in the organization after the split.
What results can you expect? The best of two worlds
When an organization seeks guidance in the context of M&A or divestitures, it can count on both strategic and operational benefits that contribute to its growth and efficiency.
In an M&A, you end up with a structural plan to transfer your IT products and services. By conducting a comparative study of your existing in-house contracts with the IT contracts of the acquired party in the context of an M&A, you can choose the best contractual terms: either you adopt the contractual terms of the company you are acquiring, or you terminate these contracts before the acquisition is finalized. You take the best of both worlds.
When selling parts of your company, it is important to renegotiate your contractual terms in order to obtain the same terms as before the split. This is quite a task, because your volumes are decreasing, yet it is desirable to keep the costs of this split to a bare minimum in terms of financial impact. This will free up new financial resources to make your organization more agile and better able to adapt to changing market conditions of today.
succes story
Curious about how to perform a due diligence?
Are you curious about how to perform a due diligence and generate savings after an M&A? Do you want to know how you can split your IT contracts safely during a divestiture process?
