Many large corporations make direct equity investments in smaller start-up companies. An estimated 8% of venture capital market activity consists of corporate venture capital deals.
A large Japanese corporation recently engaged EuroDev M&A to conduct a comprehensive buy-side search in Europe. The corporation wanted to diversify their product range and tap into new markets. Without a complete set of investment criteria, EuroDev M&A’s analyst identified more than 200 start-up companies across Europe that were at least in one way a potentially good investment for the client.
Our analyst assessed these companies based on criteria such as potential synergy advantages after a merger, global market potential and industry trends. While the initial list was quite long, he was able to shorten it using these criteria, and came up a shortlist of the most promising prospects. These start-ups were then invited to meet with our client’s management for an intensive set of face-to-face meetings. The majority of the targets were open to new investors and two companies ended up at the negotiation table.
Taking only six months from start to finish, this CVC deal was a textbook case of EuroDev’s mergers and acquisitions process in action.
Our client, a leading Russian construction company, had significant growth ambitions. Having successfully consolidated opportunities in their home market, they realized further expansion opportunities there would be limited.
Our client was invited to participate in the sales process of an EPC contractor in the Czech Republic. The company had no international activities at that time, but had long regarded Eastern Europe and EPC contracting as a potential growth area and decided to pursue the opportunity.
A joint team of client members and EuroDev members was created whose main tasks consisted of supporting the process of preparing an offer, assisting in negotiations and coordinating due diligence.
As the potential investment was attractive both financially and strategically, the client’s board and management team decided to enter the bidding process. One month later, our client received official acceptance by the authorities. After the transaction was completed, the client began to implement the business plan we helped developed on their behalf.