Transaction Advisory Process
Jaltech’s consultants, offer our clients customised financial structures that suit their unique financial needs. These include highly sophisticated financial structures, potentially involving numerous layers of debt, equity and mezzanine finance.
Our firm’s advisory services span the entire project cycle. This can be taken from the initial phases through to execution. However, some of our clients may choose to engage our services for a particular step or phase within a transaction.
The following graphic illustrates our typical approach:
When mandated to assist a client from the initial stages of a transaction, our teams typically undertake the following advisory process:
Stage 1 – Internal Due Diligence
Before a client fully commits to investing their resources into a transaction, it is prudent to perform a due diligence exercise. Working closely with management (and other stakeholders), we produce a due diligence reports including the following:
- The client’s strategy and goals and the alignment of the transaction to these
- Financial projections illustrating the potential benefit of the transaction to the client (utilising a financial model)
- Synergistic benefits (or potential drain) of the transaction to our client’s current business
- The structure of funding the transaction can support
- The financial effect under different scenarios
- Possible risks and mitigation strategies
- Summary/consolidation of non-financial elements (if necessary) provided by other stakeholders such as legal opinions, regulatory requirements, licensing requirements etc.
Stage 2 – Financial modelling
The fundamental of any transaction is centred around detailed, robust and comprehensive financial models. Our actuarial professionals will work with the client’s management team to prepare financials and projections, which will:
- Illustrate the expected revenue, profitability, balance sheet and cash flows over time and
- Allow funders to run different scenarios in order to understand the risks inherent in the underlying transaction
The detailed financials and projections will be a vital component of the subsequent capital- raising stage as they will indicate the likely risk and returns an investor would enjoy.
Stage 3 – Business case development
Our advisory teams draft business cases which allow financial institutions to comprehend the viability of the transaction. Our team goes further in continuing to mould the business case throughout the mandate in line with the various financial institutions’ feedback and credit committees’ requirements.
In consultation with our client’s management team, we will prepare a business case, which will comprise (but not limited to) the following components:
- Key transaction details and rationale
- Proposed business model and operational structure
- Market analysis
- Detailed financial projections and financial statements
- Funding requirements and structure
- Risk analysis and mitigation
- Analysis of the regulatory and economic environment
Stage 4 – Shortlisting, presentation, negotiation and finalisation of terms and conditions
Our teams will advise the client on the financial implications and strategic benefits of each funder. Once the client has selected the preferred funders, we will provide the funders with a due diligence pack (including the business case, financial model and other relevant documents), meet with the funders and present the transaction’s business case to the potential funder’s deal team. This stage would conclude with the negotiation and finalisation of the terms and conditions with the funders.
Stage 5 – Funder due diligence and CP compliance
Our professionals will ensure that the client’s management team are well prepared for the due diligence processes to be undertaken by the funders as well as ensure that the client complies with the pre-funding requirements. This includes the finalising of legal agreements (in line with the financial structure and negotiations), the registering of the required securities and concluding conditions precedent.