While it is not our intention to replace an investment bank or provide capital directly, we believe a trusted and conflict-free advisor can be of significant assistance to corporate decision makers and/or boards of directors in a number of important areas.
The following represent several of the significant activities in which we can be of such assistance:
It is important to recognize that investment banks vary in terms of expertise, focus, commitment and ability to deliver. Depending on your size, industry and specific financing, restructuring, M&A or other needs, one bank's particular capabilities may be more appropriate than another. With the recent and dramatic consolidation of the investment banking industry, most major firms also have significant lending and bond portfolios resulting from underwriting activities and commitments. This may create conflicts or issues which are best addressed before a bank is retained.
Macro brand names or referrals from friends are often not the most effective ways to choose a bank. In certain instances, the best choice may have elements of a conflict which either eliminate it as an advisor or such conflicts must be monitored to protect the company and its directors from problems which may result. We can draw on our knowledge of investment banks and individual bankers, transactions, market dynamics and a network of former clients and friends to help you make an appropriate selection. Likewise, if you desire, we can continue to work with you and the selected bank in providing assistance and advice regarding potential conflicts and the general execution of your transaction.
In the current market environment, financing may not be as easily obtained as it has been in the past. Smaller and more leveraged businesses not only face difficulties raising new capital but often have impending issues with their existing bank debt and/or bonds due to various covenants, amortization requirements and maturities. Prudent managements must develop pro-active financing strategies to assess and deal with such issues. Despite lenders' best intentions, it is often difficult for them to be completely objective in helping a company consider options which may conflict with the interests of the bank or its bondholder clients.
Similarly, expensive and/or dilutive alternatives which may be helpful to one or several creditors may not necessarily be in the best interest of shareholders or even the easiest means to address a problem. If possible, we endeavor to help a company find the best solution by providing advice free from any conflict.
With the increasingly selective nature of the public equity markets to many corporations, private equity increasingly is an important alternative source of capital. It must be noted, however, that this can be extremely expensive. Certain private equity firms specialize in specific industries and others have minimum size requirements. Those with the most relevant expertise for your needs must be identified and, to maximize your negotiating leverage, it is best to find more than one appropriate investor.
In many instances, private equity can also involve the loss of significant measures of control. Interpersonal dynamics and differing strategic visions between a private equity investor and company management and directors can become important issues which are best addressed and understood before an investment is closed. No two private equity firms are alike and virtually all have had good and bad experiences with companies in which they have invested. We have a long history of dealing with a panoply of private equity groups and can provide a company or its board with an assessment of individual firms as well as to help in evaluating proposals. Our advice will not be driven by or predicated on the benefits which will inure to specific debt holders.
Today, merger activity of any type (acquisition, divestiture or sale of a company) is heavily dictated by an important set of verities:
In any merger activity today, the potential exists for conflicting interests . We have substantial experience with large and small domestic and international merger transactions. We can provide advice in looking at alternatives before you commit to a transaction or engage a banker. Thereafter, we can be available to work with your management, board and banker to achieve the best and most appropriate strategic action.