Program to Improve Shareholder Value for
Prior to divesting an operation, it is important for management to maximize the
shareholders' value by preparing the unit for sale. The Winbridge Group, Inc.
conducts a pre-due diligence audit of the Unit using the same approaches followed by a
potential acquirer. The purpose of the pre-due diligence audit is to identify
the key elements that determine the value of the Unit and to develop an Action Program for
management to maximize the value prior to the sale.
There are a wide range of possibilities for such Action Programs:
a re-focus of the Unit Strategy to take better advantage of opportunities presented by
changes in the business environment;
re-positioning of the operation to improve efficiency, lower costs and improve cash
re-directing the marketing program to target higher potential opportunities or resolve
weaknesses in the current approach;
re-organize one or more functions to improve the implementation of the chosen course of
As a result of the pre-due diligence audit, Winbridge develops a range of values for
the operation using financial models of the operations cash flow forecasts. These
include a range of values prior to the suggested changes and then another range to reflect
the probable impact on valuation as result of implementing the Action Program. Such
an effort pays significant dividends to the shareholders by preparing the management and
the operations for dealing with the potential acquirers and obtaining the best possible
price for the business unit.
Prepares the operations of the company for the actual due diligence process to be
conducted by the potential acquirer;
Prepares the management of the company to deal effectively and efficiently with the due
Increases the probability of a high end valuation by the acquirer.
Due Diligence Process
The Winbridge Group, Inc. has conducted numerous evaluations of acquisitions in support
of our clients. We become part of the due diligence team and provide a full range of
services. These services include market research to establish the image of the
candidate and an indication of its competitive position in its industry. They also
include the skills and knowledge to go into an operation and carefully assess its
strengths and weaknesses. It is this experience that allows us to assume the role of
a due diligence team for our divesting client and perform the pre-due diligence audit.
To obtain an objective view of our client's image and competitive position, we conduct a
market research program. Winbridge have a team of experienced market researchers who
are skilled in conducting personal and telephone interviews with high level professionals.
We have found that in most firms, there is missing, critical information that is
key to the formulation of Corporate Strategic Plans. During our workshop process we
identify this missing information and then put together a program to obtain it. Most
of the information is available from key industry sources. We interview these people
either over the telephone or in person. Occasionally, we will conduct broader
based interviews using a variety of techniques form Focus Groups, to Mail Surveys to large
scale telephone surveys.
As part of our evaluation of acquisition candidates, we are often asked to produce a
valuation opinion. We have extensive experience in valuations including the
construction of financial models which are used to show the alternative futures of the
candidate. We use this skill in assessing the value of client without any changes;
and then if an action program is adopted to correct the weaknesses prior to putting
the business on the market.
It is important in conducting a due diligence program to have a team of experienced
professionals. they should not only be competent in their particular areas of
expertise but also in the due diligence process. Winbridge is
composed of a group of professionals who are skilled in industries, technologies and/or
functions. Most of our staff have advanced degrees in business, science and/or
engineering. Our teams are also skilled in a wide range of industries, technologies and/or
functions and bring these qualities to the client team. Some of the industries we
cover include instrumentation, chemical manufacturing equipment, machine tools, pumps,
valves, controls, precision molded rubber parts, industrial and medical lasers,
aerospace/defense systems and components, weighing systems and components, plumbing
fixtures, foundry equipment, electronic components, laboratory equipment, etc. We
have expertise in automation, manufacturing systems, chemical manufacturing, lasers,
rubber/plastic manufacturing and materials.
Once the Winbridge team has identified the key areas in the company
that have a significant influence on the valuation and can be improved, it is critical to
put together and implement a program to accomplish the improvements. Winbridge
workshops are designed to stimulate a creative environment. We believe that a well
founded strategy evolves out of a group which has all of the information it needs and
creative environment in which to develop the strategy. Our market research and
analytical techniques contribute the necessary information. Our creative process, as
implemented by our experienced professionals in our workshops, provides the creative
environment. All of this is done in a small number of intensive workshops. At
the conclusion of the sessions, the team has a plan that is aimed at improving the value
of the business by correcting the weaknesses.
It is critical to move swiftly in order to reap the benefits of our program.
We have worked with some our clients and evolved an implementation process
that helps to overcome this problem. It involves the use of a dedicated Strategic
Control Center, brief periodic meetings in which specific actions are planned,
follow up meetings to check progress and plan additional actions. Computer based
programs have also been used in a supplementary way to facilitate the process.