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Key considerations INTERNATIONAL EXPANSION JAMES FIELDHOUSE (M&A) ED DWAN (TAX) 28 OCTOBER 2014
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INTRODUCTION 1.Introductions James Fieldhouse (M&A Senior Manager) Ed Dwan (Tax Partner) 2.Why international expansion? 3.Achieving international expansion Organic Acquisition 4.Growth via acquisition Key considerations Agenda
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INTRODUCTION James Fieldhouse Joined BDO in 2003 Specialised in M&A since 2007 following a background in audit. Advises on Private Equity and debt fund raisings, private company acquisitions & disposals, and accelerated M&A’s across a broad range of industry sectors, including recruitment and payroll services. JAMES FIELDHOUSE M&A Senior Manager t: 07854 278 307 e: james.fieldhouse@bdo.co.uk
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INTRODUCTION Ed Dwan ED DWAN Tax Partner t: 07801 418 910 e: ed.dwan@bdo.co.uk Ex HRMC inspector BDO Partner since 2008 Specialises in recruitment and payroll sector FCSA accredited auditor Currently advising a number of local recruitment businesses on UK tax compliance matters including overseas expansion
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WHY INTERNATIONAL EXPANSION? Exploit new territories Access to new geographies and/or markets Part of a defensive strategy? Expand global footprint and/or brand To accelerate influx of candidates Enhance attractiveness to future potential buyers Rationale ENSURE CONSISTENT WITH OVERALL COMPANY STRATEGY AND BUSINESS PLAN
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ACHIEVING INTERNATIONAL EXPANSION Organic v Acquisition Acquisition Acquire, merge or form a joint venture with an overseas business Organic Set up an office or operation in an overseas territory using existing resources
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ACHIEVING INTERNATIONAL EXPANSION Organic v Acquisition Organic Acquisition 1. Speed 2. Culture 3. Cost 4. Geography 5. Size/scale
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GROWTH VIA ACQUISITION Key considerations Strategy and business plan Size? Type? Geography? Clear acquisition criteria Cash Debt Equity Funding Research Databases Use CF advisors Identifying targets
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GROWTH VIA ACQUISITION Key considerations (continued) Deal structure/multiples Off market v competitive auction sales process Offer letter Making approaches Financial (including tax) Legal Commercial Due Diligence Timescales including management bandwidth Integration Foreign currency fluctuations Other
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INTERNATIONAL EXPANSION Tax Considerations – Organic Growth Understand the nature of the assignment, potential length and the role – monitor as circumstances change What are the current circumstances of the assignees Partner with a recognised local firm Ensure UK tax implications covered Establish a clear process that will stand up to Due Diligence scrutiny
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INTERNATIONAL EXPANSION Tax Considerations – Growth by acquisition Perform tax specific Due Diligence using local country specialists and UK as appropriate Understand the tax regulatory environment of the relevant countries – e.g. what are the penalties for getting it wrong? Is the risk/ reward ratio workable? Once acquired, establish clear processes and protocols to monitor compliance on an ongoing basis (e.g. monthly updates, quarterly status reports)
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CONCLUSION Key points Do your homework Take counsel and take advice Stick to your plan (or at least don’t stray too far from it!) Do your diligence Continually re-asses performance against plan
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ANY QUESTIONS JAMES FIELDHOUSE M&A Senior Manager t: 07854 278 307 e: james.fieldhouse@bdo.co.uk ED DWAN Tax Partner t: 07801 418 910 e: ed.dwan@bdo.co.uk
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