SCC also offers special expertise for M&A consulting. 700.000 small caps and mid caps in Germany will face a generational change within the next 10 years. More than 50% of these companies are not prepared for this development. A lack of flexibility and capability for forward thinking frequently leads to failure in early successor planning. Due to this attitude retiring managers or new owners of companies can cause negative aspects in this complex process of mergers & acquisitions.

Valuable acquisition options are currently being offered in diverse industries on the German market, some of them also include the possibility of acquiring a listed company on a "stock-only" basis. Mergers & acquisitions offer SCC's clients an interesting potential for mid to long-term inorganic company growth.

The issue of how to continue the merged business operations is already facing numerous medium-sized businesses. If the company is in a good position, there will be relatives or employees available as successors, when the owner of the business decides to sell or bequeath the company, resigns or retires as a manager. In many cases successor ship leads to major problems. An option is to transfer the migration set-up and its execution to an external party with the aim to restructure business or sale the company to an external buyer. SCC contributes consulting to ensure the company's continued subsistence and at the same time safeguard jobs.

Key factors for success

Company succession planning can be divided into economic, legal, fiscal and people-related issues. In the majority of cases, deciding what terms for taking over the company would seem promising for the buyer is certain to be the economic issue dealt with first in this context. The company's positioning and image in the market must be evaluated along with its cost and organizational structure and the potential to turn out a profit in the future. Furthermore the climate within the company is a key factor for success -especially after the merger has taken place. The question of how to finance the acquisition is another important one, where SCC can advise with solutions and term sheets.

It is important to choose the right path in terms of legalities. The company can be bequeathed or sold by way of individual legal succession or through a purchase by participation or it can be leased. The involved parties must decide which option they choose, i.e. which alternative is the most favourable opportunity under economically aspects and in addition under which circumstances the respective option can be carried out. The parties must take a look at the fiscal consequences the chosen strategic option may cause for the buyer and the previous owner. One factor worth for considering is that significant savings in terms of taxes can be achieved.

As a human factor the people-related issues in conjunction with a company acquisition can be underestimated. The buyer must be suited as an entrepreneur. The owner must be willing to hand over the business. Finally the acquisition itself must be realized in a manner that both parties are benefiting. That means the new business starts-off as well as the transition to retirement is successful done. These points should all be considered carefully and any questions that come up should be answered beforehand if possible.

Any company acquisition is also associated with numerous practical issues:

How can one approach the subject without investing too much time and money?
How can one find relevant information?
How can one find out information about companies ready for succession?
Where can one find contacts to consult regarding economic, legal, fiscal or people-related issues?

SCC supports its clients with a team of competent consultants in regard to all of these aspects and numerous other issues.