Corporate Development

Corporate Development moves from desk work to deal-making as follows:

1. Competitive Position

In which industries is the company active? How is it performing relative to competitors? Thorough background work sets the foundation for a successful strategy. Using off-the-shelf sources such as financial analyst reports can speed the process.

The underlying questions during this phase are:

• Does the company need to re-position itself, or would improved execution be enough?
• If re-positioning, what kind?

2. Strategy Formulation

Strategy formulation involves various tools such as market analyses, industry maps, SWOT assessments and financial modeling.

The final strategy should concisely outline business goals, options to achieve them, recommended actions, investments, expected payouts and timing as well as fallback scenarios.

3. Strategy Execution via Strategic Transactions

Strategic transactions are powerful corporate development tools. They can also be dangerous, leading to loss of shareholder value.

• For acquisitions and strategic alliances success will depend on integration and operational implementation. Working closely with selected line managers and other members of your team ensures their commitment.
• For divestitures a “clean break” is called for. SBDG leads the process after gaining commitment from management of the divestment entity.

SBDG has extensive experience with acquisitions, divestitures, strategic alliances and licensing. The process is different for each type of transaction but the elements below are common to all:

• Price. Our experience helps identify the real drivers of valuation, leading to reliable financial modeling.
• Finding the right partner. Sometimes the best partner is not the most obvious one.
• Managing Information. SBDG manages the process to collect and assess the necessary due diligence and other information while maintaining confidentiality.
• Getting the right basic deal structure. There is an art to disclosing interests and objectives without committing to key terms prematurely. Sometimes alternative deal structures can dramatically impact the price.
• Getting the right final contract. We work closely with your legal advisors right up to contract-signing to make sure the documents reflect the business understandings of the parties.
• BATNA* (“Best Alternative to a Negotiated Agreement”). SBDG helps you set alarm buttons in advance so you will know when it may be time to walk away from what looked like an exciting deal.

(*From the excellent book Getting to Yes by R. Fisher and W. Ury; ISBN 0-14-015735-2)

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