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Deals Strategy and Operations

In the face of the global economic fluctuations, tremendous influence caused by technology innovation, and the intense competition of businesses worldwide, both domestic and foreign multinational corporations inevitably need to deal with various strategic investment decisions and transformation challenges. In order to comprehensively optimizing your investment decisions and  creating greater transaction value, PwC provides an integrated approach, from pre-deal strategy forming to post-deal integration planning,  with our extensively experienced PwC deals/M&A teams.

For every major investment decision, you would need a deal strategy to ensure the investment decision is sound, investment risks are manageable, and deal value can be created. Whether your organization is investing in a new company, industry or market, or contemplating a strategic business restructuring, or evaluating the commercial attractiveness and risks of a deal, or thinking about value creation post-deal, our impact-focused Deals Strategy professionals, who have unique blend of investment deals advisory and strategy consulting experience, can support you to make and execute on those complex but strategic investment decisions.

Taiwan market entry strategy

We support many multi-national companies to develop their Taiwan market entry strategy by assessing the Taiwan market opportunities, competition and regulatory trends, evaluating internal capabilities and resources, validating and prioritizing potential market entry options, which typically will involve M&A and partnership besides considering green field options.  We have extensive experience in assisting our clients in the subsequent M&A and partnership target, as well as analyzing the financial implications for the prioritized market entry options.

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Overseas market entry strategy

Taiwan outbound investment activities have been active in recent years due to the intense competition of businesses worldwide.  Chartering into new territories of a foreign market for the first time for many Taiwanese companies is critical to have a solid investment and strategy plan for the overseas market entry. Country and market segment prioritization are typically the first steps that we can assist, leveraging on PwC global network reach and resources.  We are also very experienced in guiding the overseas investment evaluation and strategic business planning, drawing on our accumulated outbound investment deal experience and lessons learned.

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Transformation strategy

Taiwan is in a period in which market growth has slowed, technological changes are fast, competition is keener, and costs are rising.  Both domestic and multi-national companies, which operating in Taiwan, are often faced with transformation challenges, for which strategic investment decisions need to be made to either survive or thrive.  We have proven strategic business portfolio assessment methodology and investment evaluation benchmarking database to assist in such strategic transformation, often involving organic expansion, M&A, JV, carve-out, spin-off, or divesture.

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Target search and screen

Whether you are identifying and evaluating potential targets for M&A, JV, or alliance, our team has the on-the-ground resources and knowledge base to support you in a systematic search and screen exercise, involving both strategic assessment and quantitative benchmarking and prioritization using scoring models.

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Commercial due diligence

We provide commercial due diligence support, helping to analyze target industry investment attractiveness, assess target company competitiveness, evaluate target financial and business plans, and validate value creation opportunities.  We often provide CommercialDD along with FinancialDD, TaxDD, LegalDD, Operational DD, ITDD and HRDD in an integrated approach with other PwC teams.

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We can support you in developing a post-deal value creation strategic plan to capture and maximize deal value. We have proven experience in delivering strategic and implementable business plan in an accelerated timeline to fit a deal requirement.

Taking control of my acquisitions

How can I financially, operationally and legally stabilize the acquired business?

One of the most common challenge buyers face upon acquiring a business is to effectively and timely take control of the newly acquired business while balancing and running their existing business portfolio. Failure to take control may result in loss of key talents and customers, disruptions to business operations, inability to track and measure business performance, non-resolution of regulatory compliance issues.

There are six key questions you should be addressing:

  • Have I clearly articulated and communicated my future vision for this acquired business to management and staff?
  • How do I set up an effective governance and risk management structure to manage business critical risks?
  • Were my due diligence assumptions made still valid given limited information available during pre-signing stage?
  • What are the operational, financial and regulatory risks inherent in my business?
  • How can I gain greater visibility into the business performance and meet my internal and external regulatory financial and operational reporting obligations?
  • What are the cultural differences between our current and the newly acquired business? How do I quickly bridge the cultural gaps to promote collaboration across both organizations?

We have supported several clients in successfully taking control of their acquisitions by tailoring and applying our proven global Taking Control methodology for each transaction. In doing so, we focus on key risks and value drivers, and help you define and execute a prioritized set of initiatives that deliver measurable benefits whilst minimize execution risks.

How we can help you:

  • Establish a simple and practical governance framework by setting up right level of governance and control structure for business decision-making / approval, and aligning high-level business direction among key stakeholders
  • Conduct confirmatory due diligence by identifying the potential operational, financial, regulatory and compliance issues, stopping leakage in deals and setting up mitigations
  • Design and refine management reporting by understanding the gaps in the two reporting processes, designing and implementing the appropriate financial and operational reporting to monitor business performance on an on-going basis
  • Transition planning by setting up a transition management office to plan and implement the Day 1 and first 100 days programs to align the differences between two companies and implement the changes in business (for example, people, culture, operations)

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Creating greater value through integration

Integration programs are often viewed as expensive failures, but we have seen many succeed. Success or failure is closely related to the chosen integration approach in our experience. Get this right from the start of the deal process and you will significantly increase the chances of delivering the business case.

There are four key questions you should be addressing:

  • Am I focusing on the strategic, financial, and operational objectives that matter most to me and my company?
  • How and to what level will I integrate? What are the right operating models within each of my key businesses/functions and do they fit the enlarged group?
  • How do I capture the deal value and realize the synergies I have already identified?
  • Does my team have both the experience and the bandwidth to deliver a successful integration program and maintain core business performance?

We can help you address these questions by working with you to evaluate, design, plan and execute your integration strategy. We make sure the approach taken is insightful, objective, pragmatic and flexible, and that we support the entire organization through the process from Board to payroll clerk.

How we can help you:

  • alue creation and value capture opportunities by following a well-defined, disciplined, and transparent approach to creating value and tracking synergies. We can help you accelerate the transition and achieve rapid integrations that fully realize desired synergies and allow them to return to a "business as usual" environment as quickly as possible after a deal
  • Integration planning and implementation by converting your integration strategy into detailed actions that align people, process, and systems with your integration objectives through an effective governance structure
  • Functional integration for when you require expertise on a specific function. We have a team of functional specialists responsible for integrating core functional areas and reports to individuals responsible for the overall integration

 

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Optimizing my carved-out business

How do I separate the business division or subsidiary while preserving value?

To avoid losing value during the bidding stage when you are separating a business division or a subsidiary from the rest of your business, you would need to ensure you have a detailed and workable carve-out plan ready to present to buyers.

There are three key questions you should be addressing:

  • What are the steps I should take to separate the business and how long should it take?
  • Do I want to provide all the existing services to the buyer(s)? How should I price it and for how long should I provide it for?
  • How do I prepare the target business to be standalone (as much as possible) prior to deal close in order to make it easier for the buyer to take control?

We have carve-out experience ranging from standalone businesses, to the most complex carve-outs, across a range of sectors, advising on the sell side and buy side. We understand both vendor and buyer perspectives and their impact on value to maximize your ability to deliver deal value.

How we can help you:

  • Carve-out support to help you prepare for the sale:
    • Developing a fit for purpose, cost efficient, standalone operating model;
    • Establish principles early on, define one off cost (and whose responsibility they are);
    • Defining flexible transitional arrangements to ensure the business can operate from Day 1; and
    • Create excitement, vision, and an appetite for change as people move away with the carved-out business.
  • Separation planning and implementation which includes working with you to prepare and implement a robust and executable separation plan applicable for all bidders

 

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Forming the right partnership

As businesses seek opportunities to pivot and rapidly capture new market opportunities, joint ventures and strategic alliances are becoming more important venues for CEOs. However, the success rate of partnerships can be low, as the joint models require more communication commitment to build trust, more rigorous planning to drive collaboration, and more forward-looking structure to form equitable risk-sharing.

There are five key questions you should be addressing:

  • Have you and your JV partner(s) agree on each party’s financial and operational contributions to the joint business vision, and how you will share risks and benefits?
  • Is your draft JV funding structure legally robust and tax efficient in the set-up and operation stages?  Do you have an exit plan?
  • Have you jointly developed and signed off on a detailed business plan that outlines the financial and operating models?
  • Have you agreed on the JV governance framework to clearly define management level organizational structure, roles and responsibilities, and decision-making protocols?
  • How would the JV accommodate the different corporate cultures among partners, and harness the differences to make the alliance stronger and more innovative?

How we can help you:

  • Develop a high-level financial model by quantifying your business strategy and assumptions into financial forecast that highlights initial investment requirements and future financial returns
  • Explore the optimized JV structuring options by examining the JV structuring regulation and tax efficiency in the set-up, operation stages
  • Establish a clear and practical JV governance framework by aligning well-defined board and senior management structure, leadership roles and responsibilities, delegation of authorities and dispute resolution process (secure leg room)
  • Clarify the critical business processes and organizational capabilities by constructing a high-level target operating model that outlines the key operational processes, systems and organizational structure for Day 1 as well as future state
  • Design an effective communication program for the employees by documenting the culture differences among partner organizations and providing formal and informal opportunities for all members to develop strong working relationships
  • Formulate a JV launch plan by setting up / training a launch management team to centrally plan, coordinate and track the Day 1 readiness and first 100 days programs, and mobilize resources from JV and parent groups.

 

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Contact us

Lily Wong

Lily Wong

Managing Director

Tel: +886 2 27296666, x26703

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