This is an area where we are frequently asked for assistance as business owners see a management buy-out as a means of achieving a seamless exit from their business.
In one such instance, Ecovis KGA was engaged by the General Manager of a privately held business to raise equity capital and bank loans for a management buyout of 100% of the business. The company has operations in New Zealand and Australia and significant turnover in both countries.
We procured two offers of equity funding and arranged senior bank lending within three months of being instructed.
This engagement demonstrated our ability to access capital and, equally as importantly, to find the right personality “fit” for management and the investors.
As the level of activity in the field of business acquisitions and divestments has picked up post-GFC, we have been approached on a number of occasions to bring our expertise to achieving business sales.
One example of this was when Ecovis KGA was engaged to perform a valuation of a chain of retail stores to support a trade sale to a major international competitor. Our valuation provided significant detailed analysis to support price negotiations and provided a satisfactory outcome for the vendors of that business.
We also provided advisory services including identifying an appropriate mechanism for calculating the purchase consideration subject to certain performance hurdles.
This engagement demonstrated our skills at supporting price negotiations and developing complex deal structures.
Ecovis KGA has recognised expertise in the development of superior financial models for forecasting and reporting purposes.
We developed a comprehensive set of financial forecasting and report financial models for a large group of companies in the wholesale distribution sector. They allow management and the board to report upon and forecast group profits at a product level and provide useful cash flow and future balance sheet reports to monitor compliance with internal performance hurdles and external covenants.
This engagement allowed us to demonstrate our deep knowledge of our client’s businesses and their key financial drivers.
In this age of technology, Xero is recognised as being a leading innovator in online accounting with literally thousands of New Zealand businesses having signed up for its services.
Ecovis KGA was responsible for the implementation of Xero within a large group of companies. This streamlined monthly reporting processes and allowed management more time to spend on value-adding tasks.
With Australia still being our most significant trading partner, numerous New Zealand companies are seeking to do business there but they do not always get their structures right at the outset resulting in potential tax issues.
We advised a client on the restructuring of ownership of their business in Australia to:
This engagement demonstrated our skills in identifying opportunities to minimise taxation where legally possible and to proactively present these to our clients.
When money is involved, disputes can escalate into litigation very quickly and expert guidance is needed in the resolution process.
We advised a large franchise chain on the calculation of economic losses in a dispute with a supplier. Our evidence was used to support proceedings at a Joint Settlement Conference.
Our client was able to use our robust financial analysis to support their claim for economic loss, which resulted in a confidential settlement between the parties.
We have received numerous instructions to value businesses for the purpose of dividing relationship property. Often these involve multiple companies and valuations at multiple points in time. The issues pertaining to relationship property are highly specialised and in most cases we are able to demonstrate our specialist knowledge of:
New Zealand is increasingly being perceived as a great place to do business. Inward investors can be confident that a properly structured investment in a politically and economically sound environment is likely to increase their wealth. A by-product is that investment in suitably approved investment vehicles can potentially grant residency rights.
Ecovis KGA has assisted a number of foreign investors seeking to do business in New Zealand to find business opportunities that meet their requirements, introducing them to funders and helping them to get their structures right from the outset.