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Our Speciality

Specialized Services

Our experts, with a broad range of skills and industry experience, strengthen entire transaction process of Merger and Acquisitions, conduct Valuation of Business/assets and Due Diligence

  • Mergers and Acquisitions
  • Valuations
  • Due Diligence

Mergers and Acquisitions

In the event of merger, acquisition, reverse merger and consolidation our experts help you understand the potential risks and rewards related to transaction.

For buyers, we recognize the need to unlock value at every stage of the transaction. We support an efficient transaction process even for the most complex deals. We help you align deals with your strategic business objectives, maintain compliance and enhance value from integration and potential upside opportunity and for sellers we help you to understand the potential risks and rewards of a divestiture. We assess your situation and support your negotiating position to maximize sales price and execute the deal with minimal disruption to the remaining business operations.

Our services include but not limited to :

Pre-merger analysis

Where mergers are intended within the companies in the same group, we provide detail analysis to facilitate the decisions to be made by the management. Emphasis is placed on the impact on the major shareholding, absorption of accumulated losses, absorption of tax losses, resultant goodwill and the impact on the financial statements after the merger.

Due Diligence
For due diligence analysis, scope, approach and services available from SZS, please refer to the Due Diligence services enumerated below.
Valuations and Swap Ratios
This includes calculating breakup values, present value of future earnings (involves prospective financial information), weighted average value of shares and resultant swap ratios.
Information Memorandum

This includes, notices to the shareholders, statement under sections 134 and 135 of the Companies act, 2017. The statement under section 281 contains information relevant to the scheme of arrangement including, salient features, the swap ratios and their basis benefits, the interests of directors and other related informations (pre and post financial information etc.).

Approvals & Clearance
Obtaining approvals and where required from Securities & Exchange Commission of Pakistan (SECP), Competition Commission of Pakistan or State Bank of Pakistan (for mergers of banks and financial institutions). Normally no formal clearance is required from SECP. However where it is likely that SECP may raise issues through Registrar of Companies before the High Court, to avoid unnecessary delays it is advisable that certain aspects be cleared. The aspects requiring clearance from SECP prior to the filing of the petition in the High Courts; may include swap ratios, information to be sent to the shareholders and involvement of other equity or debt.
Board Meetings and Documentation
Assistance in preparing notices, resolutions to be placed before the Boards and other documentation including Memorandum of Understanding between boards of the companies subject to merger, draft Scheme of Arrangement, Information Memorandum and where applicable matters relating to changes in Memorandum & Articles of Association.
Evolving and Preparing Schemes for Mergers
The Scheme of Arrangement is the main document that entails identification of the acquiror and the acquiree; the assets, liabilities, titles, rights and obligations to be assumed and transferred; and the consideration to be given to shareholders of the acquiree (shares for shares, cash, other equity or debt instruments or combination thereof). The Scheme of Arrangement is also the main document filed as part of petition with High Court and also requires the approval of the shareholders of the respective companies.
Changes of Memorandum and Articles of Association
The changes in Memorandum of Association of the acquiror company may be required for additional object clauses to cover the businesses of the acquiree and changes and variation in authorized capital. The changes in Articles of Association of the acquiror company may be required for changes and variation in authorized capital and where equity or debt with varied rights are proposed to be issued as consideration. These proposed changes may be made as part of the Scheme of Arrangement or alternatively may be taken up separately.
Accounting
Pre and post-merger accounting and financial functions including compliance to IFRS3 on “Business Combinations”, treatment of goodwill or negative goodwill. Pre-merger accounting and financial functions require, where applicable, removal of dissimilarities in accounting policies and treatment of certain items in acquirer and acquiree’s financial statements. This is required to ensure determination of the values on equitable basis.
Acquisitions & Takeovers
Assistance in compliance with “Listed Companies (Substantial Acquisition of Voting Shares and Take overs) Ordinance 2002”.
NOCs from Creditors
Coordination with the management for obtaining NOCs to the Scheme of Arrangement from banks and other major creditors if applicable for submission to the High Court.
Stock Exchanges
Assistance in submitting information and details on initiation of the merger process. On completion of the merger, delisting of the aquiree’s shares and listing of additional and new shares of the acquiror. Assistance also in complying with CDC matters.
Legal Advisors
Liaison with and support to the legal advisors for filing petitions and other documents and for obtaining approvals and sanctions from the High Court.
Registrar of Companies
Assistance in filing of documents and returns including resolutions, petition for changes of Memorandum & Articles of Association, orders of the High Court and Form III etc.

VALUATIONS

We help you go beyond the numbers to understand value so you can make optimal decisions for your business.

Our valuation specialists take a holistic view of value by spending time to understand your business’ dynamics, as well as industry and value drivers. We also draw on our extensive experience to apply relevant valuation methodologies.

Our Valuation professionals provide a range of services that cross the deal cycle. These include:

  • Dispute valuation:  We offer dispute services related to transactions, including dissolution of joint ventures or partnership firms determination of price per value under shareholder agreements as well as non-transactional features.
  • Fairness opinions: We help shareholders, the board or the company on the fairness of the price and terms of the transaction, as required by regulatory authorities.
  • Finance support: We can provide advice needed for raising equity or debt financing, including determining the value of equity to be issued to the new partners or shareholders of an entity, or the valuation and equity splits at formation.
  • Independent board advice: We provide independent and objective advice to help determine what the right price is to pay or accept for a business.
  • Investment and transactional advice: We help you analyze investment or divestment opportunities. This includes guidance on joint ventures and alliances where valuation advice can help in pricing negotiations or in the final investment decision, as well as equity splits at formation or exit. The integration of due diligence findings into the valuation analysis is integral to this process.
  • Restructuring: We help lenders, companies and administrators in the context of restructurings by providing valuation advice and strategic disposal options in connection with Independent Business Reviews and independent valuation opinions for the benefit of an administrator or similar acting party.
  • Valuation as required by Regulatory Authorities: We support valuation of operating assets and other assets by valuer in pursuance to Prudential Regulations of State Bank of Pakistan, determination of Surplus on Revaluation of Fixed Assets and its incorporation in Financial Statements in accordance with S235 of the Companies Act, 2017 and IAS-16 ‘Property Plant & Equipment.
  • Valuation as required under reporting standards: Our valuation supports accounting treatment under Fair Value Measurement or Impairment of Assets in accordance with IFRS 13 ‘Fair Value Measurement’ and IAS 36 ‘Impairment of Assets’ respectively.
  • Valuation of Business & Shares: Our valuations for business and shares covers range of purposes, including:
    • Attracting foreign and local investors in form of collaboration, partnership or direct investment
    • Issue of Securities on Premium
    • Divesture of shareholding or settlement of disputes between shareholders
    • Mergers & Acquisitions
    • Project Evaluation
    • Privatization Commission of Pakistan & for bids by clients to acquire units by clients on privatization
    • Obtaining additional finances from banks and financial institutions or renewal of existing facilities

Due Diligence

Our approach provides the economic rationale for a successful bid strategy and for building the foundation for an effective integration effort.

We focus our work on identifying risks and opportunities which affect value and impact your negotiating position, measuring the impact of these issues on valuation and negotiating position and highlighting areas where contractual protection or specific post-deal actions are required.
Our analysis usually includes such areas as historical / sustainable / forecast financial performance, financial position, indebtedness, reported or unrecorded contingencies, working capital, fixed assets, quality of the financial information and key financial terms of existing contracts.
Financial due diligence is often accompanied by tax due diligence, legal due diligence, valuation, as well as HR due diligence, IT due diligence and environmental due diligence.

Our Approach

Background

Review legal entities, (parent-subsidiaries) equity ownership interests etc.
Review major contracts for terms, risks, and major liabilities, Review financials, including special treatment of costs, revenues, assets and liabilities. Review ownership, rights and titles. Evaluate regulatory compliance and issues including tax.

Market

Determine size, growth potential and profitability of key market segments. Identify sources of sustainable advantage, Evaluate competitive position, strengths and weaknesses, determine customer satisfaction and buying criteria.

Other

Identify core processes, sources of advantage and sustainability, major raw materials, its availability & infrastructure. Evaluate enabling IT systems, and determine potential synergies and integration issues assess organization and culture. identify synergies and integration issues.

Valuation

Build initial valuation model including identification of income, costs, cash flows, discount rate & terminal value. Perform sensitivity analysis for each of the identified synergies. Develop bid price, based on expected values less anticipated integration costs and risks. Identify acquiree’s key requirements, combine with acquiror’s risks and develop negotiating strategy.

Contact Us

Have any questions about the SZS services? Whatever your inquiry, we will be pleased to answer.

+92 423 629 8266

30, Lawrence Road, Jubilee Town, Lahore, Punjab, 54000

M-F: 9am-5pm, S: 9am-1pm, S: Closed