The Cogent Growth Lifecycle is the roadmap for how our clients succeed:
· Assess & Optimize
· Identify Acquisition Candidates
· Candidate Approach & Initial Discovery
· Negotiate & Close
· Integration & Cost Consolidation
· Normalize/Recycle
Assess & Optimize
We help position our clients for success by ensuring they are financially and operationally sound before we prepare for each acquisition. We begin by analyzing our clients’ financial information. This helps us understand capital requirements and corporate structure needs pre- and-post acquisition. It also allows us to craft an accurate enterprise valuation of our client company as an acquirer.
The financial analysis also lets us understand costs associated with the client’s general operations. This is a component of our operational analysis, where we compare our client’s business to industry Best Practices across a variety of functions, including marketing, sales, service delivery, HR, etc. The result of this analysis is a list of short and long-term recommendations for operational optimization. This analysis also allows us to help our client establish a financial growth plan and help the client devise an ultimate exit strategy. It also prepares us to “tell our client’s story” as we engage potential acquisition candidates.
Identify Acquisition Candidates
After we create the profile of the client company, we are well prepared to begin researching candidates for potential acquisition. Our highly discreet, initial market search focuses upon initial identification and operational profiling of potential candidates. Leveraging our operational expertise, we are able to perform a fair amount of initial operational diligence before we approach the candidate company.
Candidate Approach and Initial Discovery
After building a prospective list of candidate companies, we approach the owners of the primary candidate(s) on behalf of our client to determine if there is interest in follow-on discussion. If so, we execute a non-disclosure agreement between the clients and the candidate, request an initial diligence package from the candidate, and push discussions forward based on what is discovered in diligence.
We work for our clients on the “buy-side” only and we recommend moving forward only if the transaction makes sense. We explore every facet of the deal up to and including cost consolidation and how the candidate will be integrated into our client’s enterprise.
Negotiate & Close
If the candidate company is interested in the basic structure and price guidelines communicated after the discovery phase, we continue the diligence process in earnest. We work with our client to craft a viable offer on paper, and help our client understand the financial and operational implications of the deal structure. After we gain client consensus with our approach we submit a term sheet to the candidate.
As the deal proceeds, Cogent takes the lead on all financial and operational Due Diligence, financial work, legal work and operational analysis required to keep discussions moving forward. This ultimately results in a formal offer from our client, which we then negotiate with the candidate through to acceptance of the terms. If accepted, then our work really begins: finalizing diligence, legal paperwork, accounting materials, operations integration planning and all the other work that leads to closing and a successful integration.
Cogent takes the lead with your legal and accounting counsel from the initial approach right through to the closing, so our clients can remain focused on their ongoing business. We endeavor to structure every transaction to achieve our clients’ short-term and long-term goals, so our clients know they are buying the right business at the right price.
Integration & Cost Consolidation
Throughout operational due diligence we continue to build the integration plan so that immediately after closing Cogent and our client together are prepared to execute and manage the entire cost consolidation and operational integration program. Because of the depth of Cogent’s operational expertise, we are able to carefully evaluate all aspects of the operational integration before the deal closes.
This includes identifying and mitigating potential operational risks as well as identifying and leveraging potential economies of scale. This depth of integration planning helps ensure our clients fully benefit from the acquisition as swiftly as possible. Our approach mitigates risk at the same time we ensure the core business remains stable throughout the integration process.
Normalize/Recycle
When the integration is complete the consolidated business simply becomes “the business.” At that point the business is well positioned to leverage its new scale, leverage further optimization opportunities and pursue incremental organic growth. Our client begins to accrue the benefits from net cash flow increases while we again turn our attention to new acquisition opportunities and further refinement of client operations. Thus, the Cogent Growth Lifecycle begins anew.