Targeted M&A

There are three key factors that drive a successful M&A initiative  –  thoughtful and creative design, clarity of purpose, and the legitimacy of valuation, whether the reference asset is in fintech, payments or SaaS. Though process execution is also crucial, in and of itself it’s not enough to achieve an optimal outcome without the heft and rigor behind the other three factors.

Wellesley Hills Financial’s investment banking targeted M&A services contemplate inorganic growth and exit through the prism of client objectives – objectives informed by a client’s transaction goals, in conjunction with Wellesley Hills Financial’s recommendations derived from our detailed analysis of the asset.

Whether banking the sell-side or buy-side, each project begins with the proper valuation of the reference asset. In both instances, the base-case valuation of the asset is needed to defend the bid / ask range. It’s necessary at all times to be able to substantiate the asset value with current market data derived from recent transactions and market comparisons to similar properties.

Transaction Advisory and Targeted M&A

Upon arriving at a consensus valuation range, the next challenge is to determine which suitors will have the highest probability of delivering a successful outcome. This requires thoughtfulness, and oftentimes creativity, in determining which parties to market the opportunity to. For buy-side initiatives, much thought must be applied to mapping out and articulating the ‘upside’ to the target company. In either case, it’s not just about price and ‘ability to pay’ that wins the day. Deal structure and human capital play an important role in targeted M&A transactions, begging the adage ‘price is what you pay, value is what you get.’

Fintech, payments and SaaS assets attract a lot of investor attention because of their inherent recurring revenue business model. They are historically asset-light operations that garner well defined market expectations from would-be investors, expectations that include, but aren’t limited to, client acquisition costs, gross profit, gross margins, and compound annual growth rate. Though many of these KPIs map to non-technology related sectors, within fintech, payments and SaaS, there’s nuance in the acceptable and preferred ranges for investors – nuance which requires experience, expertise, and in-depth, industry specific knowledge.

This is where we prove our worth.