Assets contributions and mergers
A player in legal restructuring operations
At the heart of corporate life
Today, the need to adapt to circumstances and to the requirements of their environment very often leads businesses to constitute themselves in the form of groups of companies in order to cooperate, diversify, acquire or sell sectors of activities, raise funds and develop their investor base.
Changing the structure of a group of companies, however simple and concentrated this group may be, is a more complex operation than restructuring within a single legal entity, whether it is a matter of contributions of individual assets, contributions of branches of activity, mergers or demergers.
Each of these operations is subject to legal regulations, has specific accounting and tax consequences and often involves social issues. In most cases, these operations bring up questions concerning the valuation of companies, independent branches or individual assets.
Issues involved in restructuring operations
What operation
Defining the operation best suited to the objective to be attained, incorporating requirements in the tax, social, accounting and financial fields.
What impacts
The appropriate solution often consists of a series of operations for which it is essential to gauge the consequences for the distribution of partners' rights, shareholders’ equity and the profitability structure while incorporating the specific costs, particularly in tax terms.
Nexia S&A, a merger and contribution expert
Consulting
- Advice on the choice of operations for accounting fields in liaison with the legal advisors
- Evaluation of the contributions, branch and entities and parity simulation
- Accounting and financial simulation of the impacts on shareholder capital and accounts
Legal missions
Nexia S&A intervenes as a contribution auditor and merger auditor and in legal interventions concerning specific benefits. These missions are stipulated by the Commercial Code. However, beyond the legal aspect, this advance intervention and the partners’ experience help to make operations secure:
- The contribution auditor assesses that the value of the goods in kind concerned by the contribution is not overestimated and gives his verdict on any specific benefits which have been stipulated.
- The merger and demerger auditor checks the appropriateness of the valuation methods used and certifies the fairness of the envisaged exchange ratio.
New
Recent reforms in company law now make it possible to designate the Contribution Auditor by unanimous decision of the partners in many cases, without referral to the Commercial Court.
Expertise in valuation
The Nexia S&A partners who intervene in Contributions and Mergers master the concepts and methodologies generally used and applied in valuation.
They use multi-criteria approaches that incorporates every conceivable method of valuation, on the basis of a prior assessment:
- Analogous methods: comparable financial operations or transactions. We use regularly updated transaction databases.
- Intrinsic methods: Updated cash flows and "DCF", revalued net asset, etc.
Service commitments
- Structured approach: letter of engagement, schedule, interim reviews, reports and summaries
- Strict compliance with the timetable
- Work as a team and coordination with the in-house teams and other advisors
- Volumes of work and fees adapted to the type of operation to be handled