Services – COHEN PARTNERS

Specialists in both domestic & cross-boarder M&A strategies.

A one-and-only expert firm in Japan that prioritizes the client’s “Next Growth” regardless of the deal size.

Financial Advisory

We offer comprehensive financial advisory services, from pre-M&A preparation, which we believe is the most important phase of all.

Pre-M&A Preparation

Clarification of objectives, priorities, terms & conditions

Questioning meaning and significance of contemplated alliance/M&A
Analyzing portfolios (subsidiaries & investments)
Analyzing and evaluating strategic options

Discussion and assessment of potential candidates

Preparation of proposals to approach short-listed candidates

Supporting preliminary discussions/negotiations and drafting initial term sheets

Drafting detailed business strategies/plans with targets (including turnaround strategies/plans)

Overall Processes

Managing overall process & monitoring schedules

Information management (preliminary info-packs, IM, DD docs)

Valuation (from “simple” to “fairness”)

DD coordination (financial, tax, legal, human resources, IT, etc.)

Structuring

Negotiation strategies

Terms sheets

Supporting documentation

Supporting coordination with relevant authorities

Closing supports

Valuation

We offer valuation services not only for common/ordinary stocks, but also for stock options, classified stocks, goodwill/intangibles assets, and so on, applying the latest valuation methodologies.

Events

Events that require valuation (examples)

M&A
Restructuring (assets, business, subsidiaries & investments)
Third-party allotments
Investment in kind, debt equity swap and pseudo debt equity swap, dividend in kinds and other capital instruments
IPO
MBO/LBO and other leverage schemes
Quarterly and annual impairment tests
Any other cases which require negotiation on assets/stocks (e.g. in litigation, disputes, etc.)

Assets and liabilities to be evaluated (examples)

Common stock, classified stock, employee stock ownership plans (ESOP)
Stock options, corporate bonds with stock options
Loan claims, debts with no market value
Intangibles/goodwill (i.e. Purchase Price Allocation)
Derivative contracts (including exotic)
Compound financial instruments such as structured debts (single & component valuation)

Deliverables

Appraisal, Comprehensive Valuation

Procedures necessary for business appraisal (valuation). Required in cases such as for a proof for investments in kind

Fairness Opinion

Independent third-party opinion to support the board’s decisions in M&A, stock swaps, MBOs, etc.

Standard Valuation

Valuation that omits some procedures required under “Appraisal, Comprehensive Valuation”. It considers methodologies such as DCF, multiples, historical transactions and so on for clients’ eyes only.

Simplified Valuation

Simple version of the “Standard Valuation” based on agreement upon procedures with clients

Financial and Tax Due Diligence

We identify and think through remedies for deal killers, and analyze historical financials to list anomalies and other issues as well as to estimate/ recreate targets’ “normalized” earnings.

Items for Review

Balance sheet items (examples)

Overestimation of assets, underestimation of liabilities, off-the-book liabilities
- Inventory (retained goods, overstock, phantom inventory)
- Operating receivable (bad debt, phantom debt)
- Unrealized profit and loss, unrecorded impairment, unrecorded asset retirement obligation
- Current assets including prepayments and advances, possibility of collection of deposits and guarantee payments
- Possibility of future utilization of deferred tax assets
- Over- or underestimation of reserves, such as retirement allowance reserves
- Evaluation of financial instruments without market references
- Disputes, guarantee obligation, unpaid wages, tax reassessment, etc.

P/L sheet items (examples)

Understanding of normalized profitability
- Analyses by division, excluding one-off, ad-hoc items and changes in accounting policies, etc.
- Factors that may influence future profitability
Analyses by region, segments, products (sales, COGS, labor costs, logistics costs)
Sizes, terms, historical & future changes with main trading partners/ suppliers

Cash flow items

Financing by segments/division
Working capital (seasonalities, payment terms, anomalies etc.)
Historical & future CAPEX
Financing options
Large and long-term contracts

Deliverables

Full Reports

Mid-term (items that require urgent actions)
Final (full list relevant issues & actions by priorities)

Quick Evaluation Report

Agreed upon procedures, reviewing 3 years worth of financial statements and 1~2 days site visits for initial decisions making process prior to advancing discussions/negotiations with targets.
Items (examples)
- Business model
- Interview with managements and key officers (finance, tax, sales)
- Accounting policies
- Reserves (retirement allowance, bad debt, bonus)
- Unrealized profits and losses (real estate)