Praxity to launch “powerful” new M&A hub
By Ian Lavis on behalf of Praxity Global Alliance
Read time | 4 minutes
An online information exchange is to be launched by Praxity in 2020 to help Participant Firms sell assets and make acquisitions for their clients worldwide.
The Mergers & Acquisitions (M&A) hub will provide a searchable listing of buyers and sellers across the globe. It will allow accounting firms to help their clients do cross-border business more easily.
The hub will complement Praxity’s existing Financial Advisory Service (FAS) facility to provide a full end-to-end corporate finance solution.
Together, the M&A and FAS facilities will help clients:
- Sell assets
- Make acquisitions
- Carry out mergers and other transactions
- Get expert advice on valuations and financial due diligence
Fantastic for clients
“This could be really powerful,” says Andy Ryder, corporate finance partner at Shorts in the UK, who originated the hub idea. “The vast majority of firms within Praxity will find it beneficial and from the client point of view it’s fantastic. It will significantly increase their chances of buying or selling a business.”
Gerhard Meyer, co-chair of the Praxity FAS Group and managing partner at FALK in Germany adds: “We want to give comfort to our clients working across borders. We want them to know we have high quality firms that will take care of their interests from mergers and acquisitions through to valuations and all kinds of due diligence.”
How it works
The M&A hub will be for the exclusive use of accounting firms within Praxity. When a client wishes to sell a business or make an acquisition in a particular country, the details will be posted on the hub by accounting professionals representing the client.
By logging on to the hub and using search criteria, fellow professionals within the Alliance will be able to match buyers and sellers anywhere in the world. When a good match is found, the accounting firms will work together across international borders to facilitate the transaction.
Firms will also be alerted to opportunities as soon as they come up. Explaining the potential, Andy says: “When there is an opportunity to buy in the UK for example, an alert could be sent to firms around the world. A partner in the US could have a client who may be interested. It means you reach a huge number of reactive people. I think that’s really powerful.”
Helping businesses grow
The development of the information hub couldn’t be better timed, with M&A set to be at the forefront of global business growth in 2020 and beyond.
Jamie McKeough, managing director of William Buck’s South Australia office, says: “With tight conditions expected to linger for some time, generating growth organically becomes harder and firms of all sizes will need to look closer at their M&A options.”
He adds: “I expect we will see more corporate transaction proposals crossing the desks of directors in the coming years. These proposals are increasingly likely to involve cross-border and overseas expansion opportunities as management seeks out new markets and customers.”
End-to-end support
An important aspect of the information hub is how it links in with the existing FAS support that Praxity participant firms offer their clients.
This support – provided by a group of experts with the Alliance – covers valuation, financial, IT and HR due diligence to help ensure best practice for cross-border transactions.
Gerhard explains: “The FAS group provides a platform to exchange know-how and best practice experience among Praxity participant firms. We examine how they use the different parameters such as interest rates and market risk premium, and the different methods they use to evaluate companies. We discuss peculiarities of different industries and which approach should be determined. For example, if a Chinese company wishes to make an acquisition in Europe.”
He adds: “The M&A support is the first step in the transaction process. Then we have the FAS and legal advice. Apart from our core business we also train our staff to think legally.”
Explaining the importance of providing an end-to-end service, he says: “It’s very important to have this facility within the Alliance for the benefit of our clients. For example, if a German client is approached by an Italian company which wants to sell a business, we contact the Italian partner within Praxity to see if the valuation has been done properly.”
The next step
The FAS group is going from strength to strength. Now the focus is on developing the M&A hub to complete the client journey from opportunity to valuation, transaction and due diligence.
A new M&A steering group presented its ideas at Praxity Global Conference in Athens in October where it was well received by members. The group will now work together with web developers at Praxity head office in London to create the online platform.