based
companies
that want to
seize
the opportunity
to
expand their
businesses into other
parts of the
world, be it Europe, Asia
or South or
Central America, face
what can initially
seem like enormous
challenges in
getting a transaction
done. Dealing with
different cultures,
customs and
practices, languages, dif-
ferent legal and
tax systems, different
currencies and
different banking sys-
tems can be
intimidating to the most
sophisticated
executives. For middle-
market enterprises
without worldwide
presence and a
network of local rela-
tionships, this is
even more challeng-
ing, and, if
managed ineffectively, can
be enormously
expensive. Most mid-
dle-market
companies do not have in-
house legal staff
experienced in managing
international
acquisitions. These com-
panies look to
outside advisors for
guidance. For
those companies con-
sidering pursuing
an international acquisition strategy, consider
the following
approach to hiring and managing your profes-
sional team.
Assembling
Your Team / The Team Leader
The first step in
managing the process is to assemble a team
of competent
professionals - lawyers, accountants and tax
advisors. The
team should consist of a strong local (U.S.
domestic) lawyer
to function as the professional team leader.
The team leader
needs to understand your business model,
strategies and
culture, and have experience in managing
acquisitions and
working internationally. He or she needs to be
responsible for
helping the company identify the overall needs
for the
professional support for the transaction. The team leader
should be someone
who can drive the entire acquisition process
from the legal
end, including negotiating the acquisition and
shepherding the
due diligence, financing and closing processes.
Who’s on the
Team?
The key players
on the team should be the senior domestic
accounting and
tax advisors and in-country legal, tax and
accounting
professionals. The most critical decision is the
selection of the
in-country advisors. There are two very
different schools
of thought. One is to hire major global firms
that have
presence in many markets throughout the world. This
approach seems to
work best for large, multi-national firms that
have needs in
many different countries at the same time and
large
transactions to support the global firm fee structures.
The other school
of thought is to hire the best local talent that
you can find.
This approach seems to best serve middle-market
companies. Hire
local professionals who have experience with
in-bound
investment and international acquisitions and financing.
You will achieve
a better feel for culture and local custom. You
are likely to
have a better local network among the professionals,
have a more
efficient process and
better manage
costs.
How to Select
the Players
In selecting
local advisors, there
are several key
questions to con-
sider. Does the
firm have compat-
ible technology
and does the firm
use its
technology in the same
manner that the
company and its pro-
fessionals use
technology? Are the
professionals who
will be work-
ing on the
transactions fluent in
English and
accustomed to
preparing
documents in English?
Are these
professionals expe
enced
in
working
with
Americans?
To answer these
questions, it
takes research,
networking and
being “on the
ground.” Probably
the most
effective way to navigate
this stage of
the process is to have
the team leader
do the ground-
work via
telephone and email, select several candidates for the
work and then
travel to interview the candidates and visit their
facilities.
These very important personal relationships need to
be created
face-to-face on the ground in-country.
How To Manage
the Process
Once the team is
identified, the next critical challenge is how to
manage the
process. Who should drive the negotiations? Who
should initiate
the key transaction documents? In what lan-
guage should the
negotiations be conducted and the key trans-
action documents
drafted? What’s the role of the local profes-
sionals? How
much does the team leader need to travel to be on
the ground
supervising the local team? What communications
and
decision-making protocols will be followed? These are
the