Hilltop’s M&A services team has significant depth of experience with mergers and acquisitions having been involved in over 250 acquisitions of banks, mortgage companies, loan servicers, REITs, real estate developers, homebuilders, insurance companies, etc. Our “integrated team concept” of utilizing experienced industry professionals with the finance/accounting, tax, operations, and technology perspectives allows Hilltop to provide “due diligence” of the target’s operations, financials, compliance, technology applications used, senior management and other key personnel assessments, etc. Our multi-disciplined team have performed the following services for the acquirer:
- developing acquisition goals, a strategy and steps to be taken,
- creating target company profiles (business and financial attributes, size, profitability, etc.) and list of possible targets,
- conducting due diligence using our standard M&A work plan that focuses on the financials, operations, risks, compliance, technology, personnel, efficiency metrics, etc.,
- performing sample loan reviews to assess documentation, compliance, credit, risk for a target lender or loan portfolio owner,
- financial modeling that incorporate buyer’s target financial outcomes (ROI, ROE, Debt/Equity, Process Cost, etc.), cash flows and income/expense projections,
- valuations of the specific assets or the enterprise,
- purchase pricing structure,
- assisting counsel with the purchase agreement terms, especially reps and warranties relating to identified risks (repurchases, indemnifications, litigation, etc.),
- closing date review,
- earn out calculations,
- contingent price calculations,
- compliance reviews of reps and warranties,
- planning and executing post acquisition business integration steps (operating structure, management positions, financial reporting, accounting, HR, technology, policies and procedures, vendor selection/consolidation, etc.), and
- analyzing performance metrics one or more years after acquisition/merger to compare actual to planned results.
Most of our engagements have been to support the acquirer or a bidder to the transaction. However, we have been involved in a number of large asset sales as a financial advisor to the seller. Our specific efforts related to asset sales have included the following assistance to the seller:
- Developing the sales strategy and related goals,
- Creating financial models (hold sell analysis, loss calculations if applicable, estimates of contingent prices, calculation of likely price to be received, etc.),
- Creating target company profiles and lists (who are the likely buyers),
- Planning the sale,
- Structure (closed/open bids, auction, other),
- Pricing (minimum bids and other pricing criteria),
- Preparing for diligence by buyers,
- Planning solicitation process for bidders/buyers,
- Preparing instructions for each step of the sales process – for the seller and for the buyers,
- Preparing a calendar of events,
- Establishing seller deadlines – when all decisions, information and other seller responsibilities need to be completed,
- Establishing a HotLine for any issues during the sales effort
- Creating the contact list for all parties needed to complete the sale
- Preparing the “data room” for due diligence,
- Managing the buyer access to the “data room”,
- Assisting with all buyer questions and obtaining seller’s responses,
- Calculating comparable sales prices,
- Obtaining offers or conducting auction,
- Analyzing offers and identifying risks/contingencies built into buyers’ assumptions/terms,
- Prepare “hold/sell” analyses,
- Make recommendation as to priority of buyers,
- Assist with any follow-up negotiations,
- Assisting counsel with the sales agreement terms (reps and warranties as well as pricing considerations as result of identified risks),
- Assisting with any closing date due diligence and transfer of assets, and
- Performing final price calculation and any contingent risks.
Given Hilltop’s resources and skill base, we are a firm with extensive purchase and/or sales transaction experience.