Mergers & Acquisitions Archives • NMS Consulting

Why SPACs Have Become Popular | Insights | NMS Consulting

Arthur Mansourian — Tue, 11 May 2021 09:24:56 +0000

The SPAC structure provides sponsors with great flexibility and few constraints.

Special Purpose Acquisition Companies (SPACs) are publicly traded investment vehicles that raise funds via an IPO in order to complete a future acquisition. They provide private companies with a unique way to access the public markets, while offering investors a way to invest side-by-side with best-in-class sponsors. To start the process, a new company is formed without assets or operations. The company registers with U.S. Securities & Exchange Commission (“SEC”) to offer and sell stock and warrants. The new company will find a targeted operating company to buy using IPO proceeds during a specified time frame, but does not have to specify industry or geographic focus.

Today, many sponsors and investors view SPACs as more intriguing and better alternatives to traditional IPOs. SPACs offer a much simpler IPO process than the traditional method, saving time and on costs. SPACs also give sponsors a lot of flexibility when the time comes to determining what target companies to merge with or acquire. Merger consideration and valuation are set when merger agreements are executed, but repricing may be possible due to market volatility or other reasons. Also, a SPAC may be willing to undertake a transaction with a company that is earlier stage than the typical IPO candidate. SPACs offer certain protections, such as giving an investor the right to withdraw capital, with interest, at the time of a proposed business combination. This provides the investor with a practically riskless free option, and is one of the reasons why SPAC issuances have increased dramatically in recent years, especially starting in 2019.

Furthermore, SPACs offer targets’ shareholders greater certainty in terms of valuation. This gives shareholders the ability to take more money off the table when compared to a traditional IPO, because in the traditional method, underwriters may set an initial price below the market’s actual valuation. Another benefit of SPACs when compared to traditional IPOs is that the timeframe for SPACs from the start of the process through to the closing is much shorter. Traditional IPO timing is typically 12-18 months, while the SPAC process usually does not exceed 6 months.

How NMS Can Help

NMS Consulting advises corporate clients on creating value through SPACs by drawing upon our team’s extensive transactional expertise. Our services for target companies who are seeking to be acquired by a SPAC include:

Preparation for being a public entity (due diligence, financials, tax structuring)
SPAC Sponsor Group identification
Structure negotiation
Internal controls, governance, and review
Addressing regulatory and compliance requirements

Our services for SPAC Sponsor Groups include:

Structure

We advise the Sponsor Group on the most suitable legal entity structure and offering terms. We are also able to help the Sponsor Group in developing and refining their corporate strategy, industry sector analysis and corporate message for both the capital markets and targets. In addition, in certain cases, we are able to make introductions to parties who may provide additional sponsor capital investment and join the Sponsor Group.

Management Team

It is important that the SPAC have a strong management team comprised of professionals with the necessary experience in both the target industry/sector and public markets. If needed, NMSC is able to provide members of its own team to serve on the SPAC management team as part of our interim management services, or introduce qualified individual(s) to supplement the overall team. Target companies may also have a need for an interim management service, to better position themselves for an acquisition.

Key Professionals

We are able to introduce and screen the most qualified professionals taking into consideration track record, availability and costs for the sponsor team. This primarily consists of accountants/auditors, lawyers, insurance providers and investment banks/underwriters/placement agents.

Preparation

Sponsor teams are able to benefit from our expertise in regard to the preparation of all requisite marketing materials, financials preparation, regulatory and corporate governance controls working in conjunction with the SPAC auditor and law firm:

Preparation of the initial SPAC financial statements
Preparation of pro-forma financials and models
Management discussions and analysis (MD&A)
Dilution and capitalization tables for S-1
Drafting for Form 10Qs and 10Ks
Drafting of internal control and review
Drafting of corporate governance program
Assist in drafting and preparing certain sections of the prospectus (legal cost savings)
Preparation of all SPAC sponsor’s marketing for the underwriters and the sponsor investors
Preparation of target landscape analysis

Target Acquisition

NMSC is able to provide comprehensive consulting services to the Sponsor Group for the entire life cycle of the acquisition process.

Target identification and outreach
Due Diligence (Financial, Operational, Regulatory and Technical)
Financial analysis and transaction support to professional service providers
Valuations
Preparation of investor presentations, pro-forma financials, combined financials presentation of proposed business combination

Post-Business Combination

NMSC specializes in providing the following ongoing consulting services to the management team following the completion of the business combination to ensure a seamless transition to ensure success:

Creation of integration strategy and approach to maximize shareholder value
Identification of cost savings/synergies
Organization design for leadership, controls and workforce optimization
Change management
Corporate Governance – Board of Directors, Regulatory and Compliance
Enterprise Resource Planning (ERP)
Digital Transformation
Strategy
Tax Advisory
Interim Management (Financial, Operational, Digital)

Mr. Mansourian has a 12-year track record as both a management consultant and investment banker, advising clients on valuation, capital markets, structured financing, mergers, acquisitions and divestitures and general corporate strategy. Mr. Mansourian served as Vice President while at NMS Capital Advisors, when the company achieved cumulative sales growth of over 5,100% with annual compounded sales growth in excess of 120% from 2012 to 2017. With over $5 billion in completed transactions, the investment bank consistently ranked among the Top 10 investment banks by the Los Angeles Business Journal. Mr. Mansourian holds an MBA from USC’s Marshall School of Business and a Bachelor’s Degree from UCLA, and the CIPP/US certificate from IAPP.

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Trevor M. Saliba, NMS Consulting Managing Partner, Selected for 2022 Visionaries List for Los Angeles Times Banking and Finance Magazine

Arthur Mansourian — Wed, 23 Mar 2022 18:39:36 +0000

As the Managing Partner and Global Head of the Private Equity, M&A and Strategy Practice Groups at NMS Consulting, Mr. Saliba is a sought-after strategic advisor to a global client base and variety of industries.

LOS ANGELES, CA / March 23, 2022 – NMS Consulting, Inc. (“NMS”) announced today that its Founder and Managing Partner, Trevor M. Saliba has been selected as a 2022 Visionary for Los Angeles Times Banking and Finance Magazine: Trends, Updates and Visionaries.

The print and digital magazine will feature the entire list of this elite group of individuals and will be included in the March 27, 2022 Sunday edition of the L.A. Times.

As the Managing Partner and Global Head of the Private Equity, M&A and Strategy Practice Groups at NMS Consulting, Mr. Saliba is a sought-after strategic advisor to a global client base and variety of industries.

NMS Consulting is a global management consulting and strategy firm focused on delivering client solutions to a global client base comprised of private and public companies, governments, philanthropic organizations and the individuals who lead. Drawing upon our global team’s extensive expertise and diverse skills, our clients benefit from a global organization of more than 250 seasoned professionals across 15 offices located throughout the United States, Europe, Asia and Middle East resulting in a unique multi-disciplinary platform.

To see the full list of the 2022 Banking and Finance Visionaires, please click here and scroll down.

To view the original publication, please click here.

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Trevor Saliba Interviewed by BuzzFeed | NMS Consulting

nmsadmin — Wed, 17 Jul 2019 15:40:58 +0000

July 17, 2019

NMS Consulting, Inc. (”NMSC”) is pleased to announce that Trevor Saliba was interviewed by BuzzFeed to discuss key factors in mergers and acquisitions. Trevor elaborated on these key points, which include the need for a great M&A lawyer, due diligence, and having a realistic timeline.

To read the article in its entirety, please go here.

About NMS Consulting

NMS Consulting is a global strategic advisory firm focused on delivering client solutions across three business units: management consulting, corporate advisory and strategic communications. The firm provides strategic counsel to private and public companies, governments, philanthropic organizations and the individuals who lead them.

For more information, please visit www.nmsconsulting.com.

Media Contact:

Terrie Gorman
+1.310.855.0020
info@nmsconsulting.com

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Trevor M. Saliba Recognized by Los Angeles Business Journal

Arthur Mansourian — Wed, 07 Jul 2021 17:17:34 +0000

Mr. Saliba is a sought after strategic advisor to a global client base working with them at every stage of the private equity and M&A transaction life cycle.

NMS Consulting, Inc. (“NMSC”) announced today that its Managing Partner and Global Head the Private Equity, M&A and Strategy practice groups, Trevor M. Saliba was recognized by the Los Angeles Business Journal as a “Leaders of Influence: Private Equity, Investors & Advisors” for 2021.

Published in the June 28, 2021 issue, the Los Angeles Business Journal profiled an impressive cross-section of the top private equity investors and advisors in the Los Angeles marketplace who fund or work on deals that shape the local and national economy in its “Leaders of Influence: 2021 Private Equity Investors and Advisors.” Included in the issue are some LA’s most successful private equity and M&A dealmakers, lawyers, accountants, consultants and insurance providers.

As the Managing Partner and Global Head of the Private Equity, M&A and Strategy Practice Groups at NMS Consulting, Mr. Saliba is a sought after strategic advisor to a global client base working with them at every stage of the private equity and M&A transaction lifecycle. Mr. Saliba’s Strategy practice supports clients post transaction closing advising on post-merger integration and growth strategies.

“It’s an honor to be recognized by the LABJ as part of this impressive group for a second year in a row” said, Trevor M. Saliba. “At NMS Consulting, we remain singularly focused on our client’s goals in the transaction to create added value throughout the process through completion. The firm has seen a significant client mandate increase in Private Equity and M&A transactions with a particular client focus on SPACs, infrastructure and real estate in 2021.”

NMS Consulting, Inc. is a global management consulting and strategy firm focused on delivering client solutions to a global client base comprised of private and public companies, governments, philanthropic organizations, and the individuals who lead. Drawing upon our global team’s extensive expertise and diverse skills, our clients benefit from a global organization of more than 250 seasoned professionals across fifteen offices located throughout the United States, Europe, Asia, and Middle East, resulting in a unique multi-disciplinary platform.

To view the original press release, please click here.

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Trevor M. Saliba Interviewed and Featured in CIO Look Magazine

Arthur Mansourian — Thu, 22 Jul 2021 23:55:51 +0000

Trevor M. Saliba, Managing Partner of NMS Consulting was interviewed and featured in the June 2021 Edition of CIO Look Magazine. The article highlighted its 10 Most Innovative Business Leaders to Follow in 2021. CIO Look is Global business authority platform for entrepreneurs, business owners, and innovators who drive business around the globe.

To read Mr. Saliba’s interview, click here.

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The Coming Recession: How Companies can Still Thrive

nmsadmin — Thu, 25 Aug 2022 10:00:34 +0000

By Arthur Mansourian

After a record long bull run, including a major comeback from the COVID-19 caused stock market decline in 2020, global data is now pointing to a likely recession in many economies. Signs that point to a new business cycle include historically high inflation, supply chain constraints, low interest rates coming to an end, and US home prices falling for the first time in 3 years.

Source: World Economic Forum

Of course, not every recession is the same, and after the Great Recession, companies are generally quicker to make changes in the face of a potential down leg. With the social and political climate around vast income differences and the rise of employee activism, cutting costs drastically can easily backfire. With so many people around the world learning to go digital because of COVID-19, companies can now use analytics and new tools to find other ways to tip the balance sheet, such as by identifying areas of growth or ways to increase efficiency.

Overall, balance sheet discipline, aggressive growth plays, timely restructuring of cost, and mergers and acquisitions prove to be the most important differences between successful and unsuccessful companies. Other factors that have proven to be instrumental are close monitoring of credit lines, balance sheets, inventory, and financial ratios. Of course, having a strong cash reserve plays a very instrumental role in surviving downturns, but it is a thin line to walk when determining how much cash to save and how much to deploy.

To not flounder, maintain market share, and continue to grow profitability during a downturn, companies with strong management need to make changes to strategy at the right time. In past environments that are similar to today, the opposite has been seen in companies that faltered, where they would make no significant changes until it was too late to stop the bleeding. Research on how companies have fared during recent recessions, and the differences between them shows that taking a disciplined yet proactive approach, and cutting costs before the markets get weaker, is paramount.

When an economy dips into recession territory, the companies that did well had a few characteristics in common. First, winning companies would take on an aggressive M&A strategy to purchase distressed companies and reinvest in themselves. Those companies that faltered during downturns tended to make the mistake of taking drastic cost-cutting measures, which has unintentional side effects and can backfire.

Other typical mistakes these companies made are letting go of valuable employees, terminating acquisition discussions, and trying to hit a homerun by investing in non-core unfamiliar businesses to make up for growth. On the other hand, winning companies moved swiftly and with purpose at the first sign of a downturn. Companies that recognized that some of the best deals happen in weak markets and during distressful times were able to capture the greatest opportunities. These companies understood that although cost control during weakness is important, completely letting go of the steering wheel and not focusing on core business, was a major misstep.

Companies that followed such a strategy not only survived through the recession but grew at an impressive pace. In the years after a recession, winning companies grew at an average CAGR of 13%, while the other companies only grew at a rate of 1%.

It is noteworthy to point out that companies that fared well actually lost almost as much money as their cohorts that did not grow during the latest major downturn ending in 2009. However, the winning companies increased EBITDA by an average of 10% once the recession bottomed out, while losing companies saw EBITDA decline by an average of about 15%.

References

Holland, Tom and Katzin, Jeff. Bain and Company. “Beyond the Downturn: Recession Strategies to Take the Lead”. May 2019. https://www.bain.com/insights/beyond-the-downturn-recession-strategies-to-take-the-lead/
Conerly, Bill. Forbes. “How A Business Can Survive An Economic Crash”. December 2018. https://www.forbes.com/sites/billconerly/2018/12/15/how-a-business-can-survive-an-economic-crash/#636014ea6aad
Laczkowski, Kevin. Harvard Business Review. “What Companies Should Do to Prepare for a Recession”. May 2019. https://hbr.org/2019/05/what-companies-should-do-to-prepare-for-a-recession
https://www.cnbc.com/2022/08/24/home-prices-fall-for-the-first-time-in-three-years-biggest-drop-since-2011.html
https://www.weforum.org/agenda/2022/07/global-economic-recession-meaning/

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Are SPACs a Good Option? | Consultant Insights | NMS Consulting

Arthur Mansourian — Thu, 29 Jul 2021 18:34:56 +0000

Foreign targets are looking to merge with U.S. based SPACs to have access to the liquidity and efficiency present in the U.S. market.

The interest in SPACs outside of the US has been strong, and it is a result of an ‘overflow’ effect where the US interest in SPACs spilled over into other countries. Interest in Europe is very high currently due to the receptive regulatory environment there, and the ability of a European SPAC to operate in a less-crowded market compared with the US. Specifically, Amsterdam has attracted several SPAC IPOs to date this year, because its regulatory rules are very similar to the US. Frankfurt is showing growth, but the legal structuring questions for SPACs in Germany present a hurdle.

The types of opportunities present are early-stage companies with significant intellectual property or growth rates serving as acquisition targets. These foreign targets are looking to merge with U.S. based SPACs to have access to the liquidity and efficiency present in the U.S. market. These companies have been reaching out to us with interest in a SPAC, as they want to leverage our domestic and international experience to ensure a successful transaction.

One example of a cross-border transaction was Netfin Acquisition Corp., a Nasdaq-listed SPAC, combining with Triterras Fintech Pte Ltd. This was an outstanding business combination, as Triterras has one of the world’s largest commodity trading and trade finance platforms, and the history of the Netfin team suggests they will be able to grow this platform exponentially and efficiently. These kinds of synergies are what make cross-border SPAC transactions interesting.

However, it is important to note that a potential risk and challenge for the target company is the substantial amount of time and resources for matters such as accounting and reporting. Also, SPACs must deal with complex valuation issues, risk of personal liability for the sponsors and board directors, and other regulatory requirements. Another risk is that the SPAC management team members are professional investors, but sometimes do not have expertise in the specific market segment in which the target company is focused. This can result in misaligned goals.

More key challenges are cultural transformation and operational integration, as two separate entities from different countries will be combining to operate as one public entity. Becoming and operating as a public entity presents a completely different atmosphere for the target company, and can lead to significant changes.

The regulatory environment is key, as we witnessed recently in the US. The tightening of regulations around SPACs has caused a decline in interest and transactions domestically for the time being. Regulations can change at any given time, so it is important to stay current with governmental entities and their stances on SPAC transactions. Market conditions do also play a significant role. As we saw earlier this year in the US, SPACs were getting tremendous investor interest for several months, but this interest has waned and now many SPACs are trading far below the prices they were at just a few months ago.

In regard to tax implications, we strongly advise legal, tax, and audit professionals to be hired during the SPAC process, to review all potential tax liabilities. Cross border deals are made much more difficult specifically due to tax laws, as well as due to regulatory rules.

Along with the challenges and risks mentioned earlier, I believe it is imperative that the sponsors are carefully vetted by potential investors. Due diligence is a tremendously important tool when determining whether to invest in a cross-border SPAC. Until the De-SPAC process takes place, an investor is basing their decision solely on the SPAC sponsors’ history and track record in a different country. Meeting with the sponsors, discussing philosophy and long-term strategy, are all key components of ensuring a successful deal. To best maximize opportunities and manage challenges, we suggest sponsors and investors identify advisors and other service providers to help during the process, as it is better to invest in the proper preparations now, rather than must unwind or run into significant hurdles later.

How NMS Can Help

Preparation for being a public entity (due diligence, financials, tax structuring)
SPAC Sponsor Group identification
Structure negotiation
Internal controls, governance, and review
Addressing regulatory and compliance requirements

Our services for SPAC Sponsor Groups include:

Structuring
Management Team Composition
Target identification and acquisition

About the Author

Dr. Harry Moore MBE is the Head of Europe, Global Head of Turnaround and Transformation. His experience and expertise include international strategy, corporate turnaround, transformation, market penetration, and increasing profitability. Prior experiences include leading business transformation teams at both KPMG and PwC, and being sponsored by the UK Government to manage initiatives that he designed to secure the future of enterprises in the SME sector in the UK. His strategies resulted in saving roughly 135 UK businesses.

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Softforay Rebrands as NMS Consulting Following Deal Closing

Arthur Mansourian — Mon, 12 Jul 2021 22:46:37 +0000

Four months after announcing its acquisition of Softforay Dijital Dönüşüm, US-headquartered management consultancy has completed the deal.

In March, NMS Consulting agreed to buy Istanbul-based Softforay, a consultancy that advises companies and public institutions in Turkey and the region (particularly Bulgaria, Kosovo and Albania) with end-to-end management consulting services, including organisation design, business process management, human resources, finance & risk management, mergers & acquisitions and digitisation.

The integration will see Softforay change its name to NMS Consulting and become (a leading) part of its Middle East and North Africa division, which also consists of an office in Dubai. “We are extremely excited to have finally completed this acquisition which was delayed due to the temporary quarantine shutdowns of certain government offices within Istanbul and Turkey. I’d like to personally thank the entire Istanbul team for their effort in making this process a seamless transaction,” said Trevor Saliba, Managing Partner of NMS Consulting.

Saliba founded the consulting firm in 2016, and under his leadership has consultancy has grown to a team of over 150 consultants working from 10+ offices worldwide.

“As businesses and industries continue to need to evolve, we will be focused on helping clients maintain their long-term goals, while also identifying pitfalls and market opportunities for them. Combining our business and people with the brilliant team at Softforay, and fusing their organisation’s technology and consulting capabilities with our own, will ensure that we are able provide more ‘on the ground’ support in MENA more readily and thoroughly.”

“By joining NMS Consulting, our local team is now able to provide a wider breadth of services and solutions. The knowledge and experience that they will bring to the Turkish and Middle East regions will help companies make monumental shifts and bring them closer to achieving their financial, operational, and cultural goals,” said Aykut Cakir, Senior Partner and Head of Turkey and Middle East at NMS Consulting.

“Both companies share similar cultural and business values, and we will be in a much stronger position together to deliver services to our customers,” he added. As part of the transaction, NMS Consulting has also closed its minority stake in Softeconomics Yazilim Ve Danismanlik, a services provider and reseller of ERP and accounting software programs.

To view the original publication of this news, please click here.

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NMS taps David Hochman, ex-LEK, as Senior Consultant

Arthur Mansourian — Fri, 29 May 2020 18:43:40 +0000

David’s expertise includes mergers & acquisitions, operational improvements, and business planning.

David Hochman is an experienced management consultant who assists companies with finance, corporate strategy, business planning, acquisitions and operational improvements. Over the past 20+ years, Mr. Hochman has developed a wide range of experience working with multi-billion dollar brand name companies, in high growth situations and with turnarounds. Mr. Hochman has helped clients by providing strategic insight, analytic rigor and a hands-on approach developed throughout his career, including at LEK Consulting. He is a trusted advisor who helps his clients and colleagues make thoughtful, analytical and fact-based decisions.

David has worked in a variety of industries including Consumer, Healthcare, Advertising, Media, Technology, and Private Equity. Companies he worked for include leading multi-billion dollar companies such as Herbalife, Ventura Foods, Qualcomm and The Walt Disney Company. Mr. Hochman has significant hands-on management experience as a key executive with high growth companies undergoing financing, creditor and operational challenges. His finance experience includes investor relations, capital budgeting, FP&A, and capital structure optimization.

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NMS Consulting to Host Webinar and Slack Group Chat

Arthur Mansourian — Wed, 06 May 2020 12:20:00 +0000

The webinar will cover direct-to-consumer and supply chain hurdles and strategies to overcome them.

NMS Consulting, Inc. is pleased to announce it will be hosting a webinar and Slack Group Chat on Thursday, May 7 at 1 PM PT / 4 PM ET. The webinar, The Direct-to-Consumer Opportunity Today, will include Joseph Toomey, Senior Consultant at NMS Consulting, and will be done in conjunction with GetGlobal, along with the VP of Direct-to-Consumer at Clorox and the Chief Digital Officer at Dole Packaged Foods.

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