613.966 6338
Level 8, 90 Collins Street, Melbourne, VIC 3000, Australia

Our M&A Process

Success can only be achieved with a robust and structured process and with high attention to detail

STAGE 1: Due Diligence, Strategy & Information Memorandum Preparation

Stage 1 is critical to ensuring the proper preparation, due diligence and strategy development for positioning the Company correctly for the Transaction.

During Stage 1, we will assist the Company to clarify the type of potential purchasers or investors (as applicable) (together “Potential Purchasers”) who will find the Transaction most valuable and the type of Potential Purchasers with whom we reasonably consider the Company are most likely to enter the Transaction.

We will also prepare an Information Memorandum that will be sent to targeted Potential Purchasers, to confidentially inform them about the Company and to offer them the opportunity to participate in the Transaction.

The deliverables of Stage 1 of our engagement

  • A short investment ‘flyer’ that can be provided to Potential Purchasers, prior to its execution of confidentiality arrangements; and
  • A detailed Information Memorandum prepared by Shape Capital based on inputs provided by and workshopped with the Company’s board.

STAGE 2: Investor Identification and Shortlist Development

We will undertake a comprehensive search for, and detailed due diligence on, parties who are likely to be suitable Potential Purchasers. This will include leveraging our established distribution networks with known investors who operate or invest in the Company’s market, and also collaborating with buy-side advisory firms. We also subscribe to leading investment banking platforms (including Pitchbook and CBInsights) which provide us with access to over 15,000 venture capital, private equity funds and strategic corporate venture funds.

The deliverables of Stage 2 of our engagement

  • Provide the Company with access to Shape Capital’s investor relationships and network; and;
  • If required and agreed between us, preparation of additional investment documents and preparing and implementing any refinements to the Transaction structure (as approved by the Company) to maximise the Company’s value to Potential Purchasers.

STAGE 3: Deal Pipeline

The focus during this stage is to advance the development of the Transaction with Potential Purchasers, and to start a formal engagement process with Potential Purchasers. These services include:

  • Negotiating confidentiality agreements and NDAs with Potential Purchasers (the Company’ lawyers will develop the template confidentiality agreement);
  • Contacting Potential Purchasers (subject to the Company’s consent), sending them the Flyer and/or the IM, and gauging their interest in the Company and the Transaction (all subject to the Company’s consent);
  • Meeting or conferencing with the M&A teams and/or legal teams of the Potential Purchasers;
  • Project managing the preliminary due diligence process (including managing the day to day operation of an electronic data room and responses to any requests for information or other questions submitted by Potential Purchasers); and
  • Running a formal process inviting Potential Purchasers to submit non-binding letters of offer.

The deliverables of Stage 3 of our engagement

  • A list of engaged Potential Purchasers and a report on all discussions between Shape Capital and Potential Purchasers; and
  • Securing submissions of non-binding letters of offer from Potential Purchasers.

STAGE 4: Interviews & Due Diligence

Should a number of Potential Purchasers be identified and should those Potential Purchasers submit a non-binding letter of offer that is within valuation expectations of the Shareholders, then they will be invited to meet the Company’s management and participate in further due diligence in relation to the Transaction. Shape Capital will assist the Company’s board to prepare for those meetings and will manage the competitive sale/investment process, including establishing day to day management of an electronic due diligence data room, advising on the timing for granting access to due diligence material (which may be granted in tranches), and managing the process for the Shareholders or the Company’s board responding to any requests for information or other questions submitted by Potential Purchasers.

The deliverables of Stage 4 of our engagement

  • Meeting Potential Purchasers to arrange additional due diligence and meetings with the Company board; and
  • Completing additional due diligence in preparation for formal offers and term sheets.

STAGE 5: Term Sheet & Negotiation

This stage focuses on securing term sheets through a competitive sale/investment process. Shape Capital will settle (with the Company’s legal advisers) a preferred form of term sheet to provide to Potential Purchasers, and negotiate with Potential Purchasers (and their advisors) to ensure the maximum price and most favourable terms are achieved (or alternatively depending on the deal, Shape Capital will together with the Company’s lawyers negotiate the Potential Purchaser’s term sheet). The term sheet often includes the following details:

  • Price;
  • How investment will be funded; Conditions Precedent (if any);
  • Further due diligence (if any); and
  • Key terms of the Transaction.

The deliverables of Stage 5 of our engagement

  • A template term sheet.

STAGE 6: Transaction Documentation & Completion

This stage focuses on executing and completing the Transaction in line with the objectives and instructions of the Company. The key activities in this stage include:

  • Project management of the final due diligence;
  • Finalising the Transaction structure;
  • Project management of the Transaction, including satisfaction of any conditions precedent and completion deliverables;
  • Managing internal and external communications with the Company’s board and investors; and
  • Working collaboratively with the Company’ lawyers and accountants on Transaction documentation and finalisation.

The deliverables of Stage 6 of our engagement

  • If approved by the Company, a finalised deal for the Transaction!