PCA Corporate Finance operates as a financial advisor to company owners and management on the planning and execution of mergers and acquisitions and other corporate finance transactions. To put it simply, all our projects have one shared and overarching objective: to achieve our client's strategic objectives and the best possible outcome.
Our advisory services include:
Mergers and acquisitions
Real estate transactions
Valuations and fairness opinions
Management incentive plans
Other general financial advisory services
In most cases an M&A transaction is a unique and multi-phased project that requires specialist industry expertise, plenty of experience and sufficient resources. These requirements are also our strengths. PCA’s team has wide experience in different types of buy-side and sell-side M&A transactions. Our financial advice has yielded excellent results: drawing on public market transactions as an example, we have sold companies at high premiums and acquired companies at low premiums to their stock market valuation.
Our services cover all stages of mergers and acquisitions, from planning to execution, as well as the management of the entire transaction process from start to finish. In cross-border transactions, we work together with our international partners. PCA is part of Clairfield International and through the partnership we are able to provide our clients M&A ideas and local service in approximately 30 countries throughout Europe, the Americas, Australia and Asia. Clairfield International has been ranked by Thomson Reuters as one of the top three independent M&A advisors both worldwide and in Europe.
For more information on mergers and acquisitions, please see the Basics of M&A.
PCA Corporate Finance assists and advises its clients on the raising of equity and debt financing and on designing the optimal capital structure.
Fundraising projects typically include a review and further development of the target company’s business plan and financial forecast model, preparation of an information memorandum for investors, identification and contacting of investors, competitive tender process between investors and finally selection of investors, banks and other financiers as well as execution of the financing round.
We have acquired new investors and financing for many types of enterprises from growth businesses to publicly traded corporations as well as for both venture capital funds and project finance companies. Through our broad experience, we have built excellent relationships with Finnish pension and insurance companies, foundations, family investment companies, private investors and venture capitalists. In most projects we also approach foreign venture capital funds and other professional investors. Our investor contact base includes over 200 active investors in Europe, USA and Asia.
We also have in-depth knowledge of debt and mezzanine capital instruments and their suitability for different structures. We have, for example, pioneered project finance transactions in Finland and have completed a number of complex structured finance projects. We maintain excellent relationships with banks and specialised financiers with whom we work to achieve the best possible terms for different applications.
PCA Corporate Finance has an experienced advisory team that has strong knowledge and know-how also on the special characteristics of real estate transactions.
Our financial advisory services include
Buy and sale of property investment companies and portfolios
Fundraising and financial structuring, also in distressed debt situations
We are responsible for the management of the entire process, in the same way as in any other mergers and acquisitions or fundraising projects.
PCA Corporate Finance also offers financial valuations and issues fairness opinion statements needed by, for example, boards of publicly traded companies in order to give their recommendation to public takeover bids or to make decisions relating to share issues or mergers and acquisitions. Valuation is a key component of any M&A project and during our long history we have developed solid expertise in the valuation of different types of companies in a variety of market conditions.
We always use several types of valuation methods in our work. For example, in market-based valuations we determine the target company’s value by comparing it to other listed companies operating in the same industry and by calculating the value based on valuation multipliers in previous M&A transactions in the same industry. Cash flow valuation is based on the long-term financial forecasts of the target company and the estimation of the required rate of return for the target's equity and debt instruments given its industry, optimal capital structure and other characteristics.
PCA Corporate Finance offers financial advisory services in the planning of management incentive plans. We have designed employee issues as well as option and share-based management incentive plans for some of Finland's largest publicly listed companies as well as for some of the largest private equity deals. Each managemenet incentive plan is tailored to the client’s individual requirements.
A competitive management incentive plan that is prudently designed and based on the client's individual requirements motivates key employees and thus helps the company achieve its objectives. The objective of management incentive plans is always to maximise the shareholder value of the company.
“From a strategy perspective, this pan-Nordic acquisition giving us a solid position in Finland as a new market was highly important for us. The support and value-add we received from PCA throughout this complex transaction was very substantial. We look forward to working with PCA also in our follow-up acquisitions.”Thomas Jessen, Investment Director, Kverva
“From a strategy execution point of view, the project was of very high importance and the support and value-add by PCA was substantial.”Janne-Olli Järvenpää, CEO, Mehiläinen Group
“We benefitted greatly from PCA’s experience and expertise during the acquisition. PCA’s team showed genuine commitment throughout the process and we are very satisfied with the results.”Rasmus Nerman, CEO, Humana
“PCA provided high value-added to the transaction process and we are extremely happy with the outcome.”Nina Kopola, CEO & President, Suominen Corporation
“We benefitted greatly from PCA’s experience and tactical knowhow in all phases of the professionally managed M&A process.”Patrik Puskala, Managing Director, Autoklinikka-yhtiöt Oy
“PCA provided us with high quality advice and team understood the special features of this technology transaction.”Hannu Huttunen, President, Elektrobit Wireless
“In this complex transaction PCA’s innovative approach and deal experience played a big role. We are extremely happy with the outcome.”Matti Hyytiäinen, President & CEO, PKC Group
“We greatly benefitted from PCA’s previous experience in advising technology companies in transacting with large US and other international corporations.”Pentti Hurmerinta, Chairman, Clothing+
“PCA’s sell-side advisory services supported significantly the seller in achieving its set objectives.”Pasi Lehtinen, partner, Korona Invest
“PCA played an important role in the transaction by helping to secure a good end result for the owner.”Timo Kankuri, Managing Director, Governia Oy
“PCA’s team executed the sale process of Silta Oy with strong professionalism.”Kari Partanen, Managing Director, Silta Oy
“The financial advisor teams in Helsinki and Prague worked very well together and showed strong professionalism and commitment from the beginning of the acquisition process.”Vincent Poujardieu, VP Business Development, Raisio Oyj
“PCA arranged a highly successful international auction process for NetHawk.”Seppo Matikainen, Chairman of the Board, NetHawk Oyj
“PCA’s team demonstrated excellent tactical skills in the sale of our subsidiary.”Pekka Ekstam, Vice President, M&A, Elisa Oyj
“PCA’s broad experience in M&A and financing transactions contributed significantly to this complex and multiform project in its different phases.”Matti Hietanen, Government Counsellor at Ministry of Employment
“PCA was actively involved from the beginning of the process and brought A-lehdet significant value added in this strategically important transaction.”Juha Blomster, Managing Director, A-lehdet Oy
“PCA’s team showed significant commitment to accomplishing our goals in this complex transaction.”Martti Uusitalo, Managing Director, Halti Oy
“PCA managed the selling process excellently and was very committed and understood the special characteristics of a transaction involving family business.”Ulf Forsström, Managing Director, Oy Sultrade Ltd
“Great job. Sentera was sold at a price of 30% above its stock exchange valuation.”Timo Tiihonen, Chairman of the Board, Sentera Oyj
“The PCA team has shown full commitment in helping us achieve our objectives.”Lasse Rosengren, General Counsel, Talentum Oyj
“PCA did outstanding work in the sale of our Engineering Services division.”Kari Harsunen, CEO, SWECO Industry Oy
“The end result exceeded our expectations. Puuharyhmä was sold at a 46% premium.”Erkki Mattila, Managing Director and founding partner
“PCA has come up with a number of acquisition ideas for us in the Finnish market.”Lars Eriksson, Regional Director for Origination, Riverside
“PCA contributed in a significant way to sort out the challenging situation of the company.”Ville Parpola, Vice President, Legal Affairs, Cencorp Oyj
“We have been very pleased with the ongoing cooperation between our two companies since 2004.”Arto Herranen, Managing Director, Enfo Oyj
“PCA generated distinctive value added to us at all stages of the Reima acquisition.”Reijo Grönholm, Partner, Vaaka Partners
“The sale process involved tough negotiations from start to finish. PCA's support was the key to our success.”Ahti Paananen, Managing Director and major shareholder, Viitapuu
“The sale of 30 years´ lifework cannot be entrusted to incapable hands.”Pekka Eräjää, Managing Director and key shareholder, Top-Sport O
“Acquiring a EUR 20 million financing package for Hansastroi was not a routine project. PCA did an outstanding job.”Eero Makkonen, Chairman of the Board, Hansastroi Oy
“PCA enjoys excellent and extensive relationships with the Finnish investor community.”Fredrik Ekman, Managing Director, Mint Capital
“PCA handled the sale of our business professionally and achieved outstanding results.”Olli-Pekka Kulmala and Tapio Venäläinen, owners of K&K Active Oy
Over the years PCA Corporate Finance has gained extensive expertise of different types of mergers and acquisitions transactions.
Selling or acquiring a business is always a unique process. PCA uses professional tools to ensure that the clients’ objectives are met and transactions are successful.
Click above for further details on selling a business and/or buying a business processes and PCA’s financial advisory role in these arrangements.
The acquisition of a business can serve a number of different purposes, such as increase market share, geographical expansion or movement either up or down the value chain, or even diversify operations by the acquisition of a completely new business operation.
In addition to the buyer’s objectives, any acquisition project is influenced by the following variables:
The key to a successful acquisition is the buyer’s ability to familiarise itself with the target business and assess its potential realistically.
PCA Corporate Finance will assume overall responsibility for the set objectives in a buy-side engagement and prepares an acquisition process plan which best achieves these targets.
According to various studies, the most successful acquisitions are those where the buyer is pro-actively seeking acquisition targets, only buys targets that match its strategic objectives well and does so at the right valuation. PCA becomes involved at the beginning of the process to further specify the buyer’s own acquisition criteria and to create a ‘long-list’ of potentially interesting acquisition targets. PCA prepares brief company profiles with key company information to supplement the client’s own information on possible targets. If the target business is domiciled abroad, PCA can make use of the extensive partner network (e.g. KBC Securities in Eastern Europe and Altium Capital in Western Europe) to gain local expertise.
PCA sometimes targets a business that is being offered for sale by another investment bank through a competitive sales process. On these occasions it is essential that the competitive environment is assessed from the client’s point of view. The possibility of entering into to bilateral one-on-one negotiations should also be investigated.
If the targeted company is not officially up for sale, the first contact phase may be difficult. First, a decision needs to be made as to whether to approach the target company’s owners or the management. Another common question is whether PCA will disclose the buyer’s identity straight away or whether the identity is kept confidential until a later stage. During the first contact phase it is essential to be able to promote and reason the buyer’s interest in the potential transaction sufficiently and in a selling fashion.
The preliminary evaluation of the target will typically include the client’s own strategic and business evaluation and PCA’s first valuation. The preliminary evaluation is usually based on public information, discussions with the management of the target company and in a competitive sales process also on an information memorandum or other investment material.
It is essential to ensure that resources are used efficiently and it should be assessed at an early stage whether pursuing the negotiations will be worthwhile or not.
The target company’s evaluation is continued by additional information on the target acquired at a later stage. The acquiring company must commit a significant amount of its own resources to evaluate the business as well as plan the takeover of the target company. It is essential to carefully plan for the take-over of the business at an early stage.
At this stage PCA’s valuation is supplemented by, for example, synergy assumptions, effects of acquisition financing and any information on the target company acquired during the due diligence checks. It is also important to estimate the value from the vendor’s point of view and – if it is a competitive bidding process – analyse the competitive environment between potential buyers.
PCA prepares sufficient financial analyses for the clients to support the pricing process by collating arguments to justify the valuation and will suggest different types of purchase price mechanisms that take into account the different risk factors relating to the target company. These could be different types of earn-out purchase models, joint ownership models and vendor financing instruments. It is also significant to secure exclusivity to negotiations as early as possible during the process.
During the acquisition process, the key negotiating tactic considerations include: the decision to take part in a sales process or to make an offer, the form and content of offers, assessment of competitive environment, the efficiency of due diligence expenses and exclusivity considerations for negotiations.
Business acquisition is not a straightforward or simple exercise to undertake. During the 4–6 months that the process takes, a number of complicated business and personnel related, financial and legal matters will have to be sorted out and the process may be painful. The experience that PCA Corporate Finance has gained by working under hundreds of M&A advisory engagements combined with efficient project management ensures that all parts of the process develop and come together in the end to create the best possible outcome for the vendor.
All companies as well as all sales situations are different. In addition to the core objective – maximising the sale price – the vendor usually has other important objectives which must be achieved to make the sale successful.
The following characteristics, as an example, make each sales process unique:
PCA Corporate Finance will assume overall responsibility for the set objectives in a sell-side engagement and prepares a plan for the sales process which best achieves the targets set.
Valuations and justification of valuation are key components in all PCA Corporate Finance engagements.
PCA works together with the owners and management of the client company to estimate the company’s growth and profit potential and also prepares a financial analysis and valuation using a number of different methods. As a part of the financial analysis for example working capital fluctuations during a financial year and investment plans will be reviewed, both of which are examples of factors that could have impact on the ideal timing of the sales process.
As part of the valuation PCA identifies assets not related to the business operation such as excess liquid assets, properties and other assets. Buyers are usually not interested in these assets, but separately they might carry a significant value. Therefore PCA prepares a proposed structure to maximise also the value of these items.
Selecting the sales method and preparing an investment story for potential buyers are key stages in the sales process. Alternative sales methods include:
The choice of sales method is influenced by, among other factors, the industry in which the company operates, its market position, size, value, debt capacity and future plans. The financial environment has a significant effect on the recommended sales method.
The investment material prepared by PCA together with the vendor describes the company’s business plan. The material highlights points that encourage potential buyers to submit an offer and that are most likely to increase the company’s value. The information contained in the investment materials is more limited if the list of potential buyers includes direct competitors.
Creating a sufficiently high level of interest and a competitive environment is the key to a successful sales process.
PCA prepares an initial list of potential buyers. The list is then evaluated together with the vendor and the parties to be contacted are agreed upon together.
There are various ways of communicating the potential transaction opportunity and its investment story to prospective buyers. Sometimes the company issues a press release to publish the sales intention. However, more often PCA will approach selected parties confidentially to test their interest in the target company’s industry and operational area (pre-marketing). PCA then follows this up using a so called teaser letter that does not include detailed information about the target company and explains why potential buyers should be interested in the target company and why it is in their interest to participate in the sales process. Based on these discussions, PCA will finally decide on how extensive the sales process should be or whether it would perhaps be better to postpone the process altogether.
The sales process begins with the signing of a confidentiality agreement by the buyers and the distribution of the investment materials (e.g. information memorandum) to them.
Depending on the selected sales method, the investors may be asked to submit a preliminary, non-binding offer based on the information they have received. The offers received will qualify the most promising buyers which are invited to further negotiations and asked to carry out the required due diligence investigations. Subsequently, the buyers will give their final and binding offers. In some cases it is recommendable that potential buyers are just invited to meet with the target company’s management to discuss their interest in the company and suitable avenues to proceed.
It is essential that the most appropriate sales method is used to make the sales process credible among potential buyers. It is also very important that the vendor keeps a number of competing alternatives as long in the sales process as only possible to ensure that the best possible option can be chosen in the end.
The negotiation tactics used in the sales process depends on a number of factors including justification of valuation views, the choice of sales method, the degree of details included in the investment materials, competition and exclusivity in negotiations as well as methods used to maintain the valuation level indicated by the buyer at the start of the process. It is also important that the target company’s management is able to carry out its day-to-day operations as usual during the sales process in order to ensure that the promises made in the investment material will be kept.
Selling a business is not a straightforward or simple exercise to undertake. During the 4-6 months that the process normally takes, a number of difficult business and personnel related, financial and legal issues will have to be overcome and the process may be stressful. The experience that PCA has gained by working in hundreds of M&A advisory engagements combined with efficient project management ensures that all parts of the process develop and fit nicely in the end to create the best possible outcome for the vendor.