Deal Closing Skills for Corporate Financiers

Deal Closing Skills Training Introduction: The Deal Before Final Offers (Maximising Financial Terms)

• Recap on buyer discussions to date, review information provided and extent of diligence remaining
• How to encourage buyer interest and maximise value, ahead of final offers
• Choosing the preferred bidder
• Assessing the buyer’s position – financing and synergies: supported by examples and case studies to assess how fully they are bidding
• Deploying ‘Why pay more’ arguments (with case studies) to maximise the value of final offers
• The value of early positioning on the equity bridge

Negotiating Heads of Agreement: Reducing Risk to the Seller

• Why the financial adviser should lead on Heads
• Maximising competitive tension
• Key financial points to negotiate and lock in, with a case study
• Filling information gaps (where necessary) to remove the potential for dispute
• Exclusivity – what does this change?
• Ways to reduce the risk of price chipping

Key Soft Skills at this Stage of the Process

• How to build relationships across the deal – and carry the value of those in final negotiations
• Converting an ‘understanding’ into agreed terms
• Understanding the buyer’s strategy and motivation
• Keep on top of value drivers

Linking the Financial Terms of the Heads to the Sale & Purchase Agreement

• Recap of key financial provisions in the SPA
• What points can be agreed upon in Heads? What has to remain open?
• Overview of how SPA can be ‘buyer-friendly’ or ‘seller-friendly’

Principles of Finalising the Purchase Price: Before Heads and Beyond (Why Some Financial Points Inevitably Remain Open)

• Cash and debt – the likely key debating points
• Setting the working capital target (case study included)
• How to identify manipulation in working capital
• Pulling in due diligence findings, which should go to price, with examples
• Understanding ‘permitted leakage’ – what leakage goes to price (and what does not) – with a case study

Deal Closing Skills Training Technique: Finalising the Price

• The importance of ensuring a clear link between the agreed pricing and the terms of the SPA
• Completion accounts / locked box workings – overview and comparison of key steps and key variables
• Case study – what can go wrong in a completion accounts process
• Case study – tracking the ticker in a locked box structure

Differences in Asset Purchases from an M&A Perspective

• Getting the asset definition right
• Apportioning value – potential issues (e.g. tax)
• Are price adjustments appropriate, and if so, what approach should be used?

Key Commercial Points in the SPA: An Overview (What the Financial Adviser Needs to Appreciate)

• Deal closing needs advisers to work together: Where the financial adviser guides the lawyers
• Interaction with the disclosure exercise, and how this may go to financial terms
• Where an indemnity may be appropriate – Case studies
• The potential value of warranty insurance (to both parties) in heading off commercial concerns

‘Confirmatory’ Due Diligence and How This May Affect the Price

• Financial adviser’s role in staying abreast of the buyer’s diligence
• Advise the client on potential issues and how to deal with them
• When is it time to ‘close off’ diligence? Explaining the technique for forcing this

Cash Movement at Completion: The Financial Advisor’s Role in Drawing up a Funds Flow

• Case studies based on actual transactions to draw out key components
• Allowing for possible last-minute changes
• Where escrows and holdbacks may affect a deal – case studies of what is reasonable
• Treatment of expense deductions
• The importance of giving clear instructions to the buyer and the lawyers

Deal Closing Skills Training Course Conclusion: A recap on tradecraft and any further messages

Redcliffe’s Deal Closing Skills for Corporate Financiers course is delivered by an expert with real-world experience. He has worked on corporate finance deals and capital markets transactions for over thirty years, holding positions on the client side as well as leading advisory teams.

At the Department of Energy, he was a civil servant involved in the privatisation of British Gas, a global IPO involving a large advisory team. From 1990-1992 he spent two years in the Hungarian Government privatisation agency working with many advisory firms, as the changing political environment triggered massive ownership change. He has worked in major investment banks (Swiss Bank Corporation International, now UBS, and Lazard) and also co-founded a successful M&A advisory boutique firm. In 2021 he retired from KPMG, where he spent 13 years in the firm’s global M&A business, based in Scotland.

His experience combines a broad range of M&A and equity transactions in North and Central America, Asia Pacific, all the major European countries, and more recently in Africa. His courses draw deeply on case studies from transactions he has run, bringing practical examples to set alongside the theory, which includes this deal closing skills course.

Our deal closing skills training will cover the following:

• Practitioners with less experience will accelerate their learning around the latter stages of the M&A process with discussions of tradecraft, case studies and best practices.
• Focus on a range of detailed techniques, highlighting key value points and other commercial terms which are often only addressed in the final negotiation, making clear where wins and losses may ensue.
• Quickly appreciate why this is not ‘something which can be left to the lawyers’.
• Address the issues which require detailed engagement from M&A practitioners right through to the point at which cash moves. We explore how they should remain engaged to ensure they achieve the best deal possible for their client.

• For many financial practitioners, M&A is about winning the mandate and bringing the company to market. But there’s an overlooked skill in managing the latter stages of a sale process. Developing buyer interest, negotiating final offers and pulling all the details of the deal together, through to completion – the point at which the deal is closed – are all areas where value leakage can occur. Redcliffe’s deal closing skills training course covers this and more.
• With the majority of most M&A fees tied to successful completion, you need to know how to drive the deal every step of the way to closing, ensuring receipt of success fees, as well as a happy client. This deal closing skills training focuses solely on the latter stages of the M&A process, from the perspective of a seller and their financial adviser. It begins with turning interest into final offers and covers all of the detailed financial and commercial negotiations which feed into the terms of the definitive, legally binding sale & purchase agreement (SPA).
• Our trainer has been involved in negotiating and closing M&A transactions for over 25 years.
• This is not an SPA course, and does not address the legal framework; it is a course to enable corporate financiers and their clients to understand how to finalise a deal ‘beyond the handshakes’.

This deal closing skills training course is a ‘must know’ for:

• Professionals closely involved in the detailed work leading up to the completion of M&A transactions
• M&A professionals at all levels, but especially those running transactions day-to-day
• Corporate, in-house M&A team members
• Private equity professionals who manage or oversee the execution of their firm’s deals

This deal closing skills course is a ‘nice to know’ for:

• Legal and other advisers involved in the M&A process, seeking a better understanding of how transaction processes are run, and the financial focus as deals approach completion.
• Legal advisers seeking a better understanding of the financial principles behind completion accounts and the locked box approach.

M&A transaction fees are famously back-ended, with 90% (sometimes 100%) contingent on successful completion. Add to this the fact M&A processes are rarely straightforward, and represent a big and (often) one-time decision for one or both parties: both the buyer and seller.

Therefore closing deals is not straightforward. Yet financial advisory houses still consider origination as the holy grail, with business winners treated as rainmakers, and those tasked with delivery seen as water carriers. This deal closing skills for corporate financiers course aims to give full exposure to the skills and tradecraft needed to become a master practitioner who consistently closes deals.

Starting in the middle of a typical sale process, with established interest but ahead of final offers, the course covers every skill and negotiating point relevant to ‘bringing the deal home’. It addresses how to drive business value and negotiate the fine details of equity value, including completion accounts and locked box pricing.

Redcliffe’s deal closing skills training course focuses on all the necessary soft skills that maximise buyer interest, and carry all parties to the transaction process forward, bringing due diligence to a head. There is a specific focus on how to choose a preferred bidder and lock in key terms via Heads of Agreement.

Lastly, there is a section to help understand the areas of the SPA which can cause commercial disputes (or be used to solve differences), and how financial advisers can best interact with the lawyers as the SPA is finalised.

Above all, completing this course gives you greater control over the latter part of any sale process you are managing, making you better at closing the deal.