BANKING ON TCDG
“The Corporate Development Group creatively integrates the activities of Business
Development and Investment Banking to deliver opportunities for financing,
growth, and profits. Leveraging competitive advantages through activities such as
corporate partnering, strategic financing, mergers and acquisitions, and strategic
planning are a TCDG hallmark.”
TCDG is known for its focused expertise in the food
and agribusiness industries. TCDG has worked with a
broad range of food companies over the last 10 years,
from regional cooperatives to large companies. Given
the on-going changes in the food industry, it is critical
to have an advisor that thoroughly understands food
industry trends, consolidation fundamentals, and
specific value drivers. TCDG is comprised of a
dedicated team of experienced professionals that
understand the unique characteristics of the food
industry. Having completed numerous transactions
TCDG provides clients with superior industry-specific
knowledge and insight, an in-depth understanding of
key trends and value drivers and significant experience
on relevant investment banking projects.
TCDG’s expertise in M&A and capital placement are recognized
in all segments of the food industry, from producers
and processors to wholesale distributors, including evolving
specialty areas such as healthy lifestyle products, and natural/
organic foods. This in-depth industry knowledge combined
with unparalleled transaction experience in the middle
market, provides our clients with exceptional valuations
and superior results.
Strategic Acquisition and
Consolidation (“SAC”)
The Corporate Development Group has
specifically designed this process to assist
middle market food companies in developing
and implementing strategic acquisition and
consolidation activities.
- SAC enables companies to create a served
market dominance by:
* Utilizing external resources to
accelerate growth beyond
internally achievable.
* Expanding in a time-efficient
manner the key business units/
product lines that will contribute
the most to achieve economies of
scale.
* Creating above average earnings
through operating efficiencies,
increased penetration with
customer/markets, SG&A
absorption, and other benefits in
purchasing and cross-selling.
The TCDG Advantage:
- TCDG’s integration of industry insight,
investment banking, and marketing is
ideal for developing and implementing
realistic acquisition strategies; and
- Most importantly TCDG stays involved in
the consolidation and activities of
future growth.
Distressed M&A
Distressed food companies face challenges to satisfy creditors and employee claims while
trying to deploy company assets to their highest value. TCDG combines its M&A and
Repositioning experience in advising either buyers or sellers of distressed assets. TCDG, with
its working knowledge of the food industry, is able to advise a client throughout the entire
process, including identification of targets/buyers, participation in a sale/acquisition process,
and court proceedings if necessary.
The TCDG Advantage:
- TCDG begins by researching and gaining a full understanding of the company.
This enables TCDG to leverage the identified competitive advantages and
valuation of intangible assets.
- TCDG also brings to the forefront internal drivers (asset utilization, supply chain
management, raw material sourcing) and external drivers (industry analysis,
economic and technological changes and effects). These determine a company’s
future growth potential.
- TCDG develops a clear picture of the company’s strategic positioning. Then it
carefully crafts approaches that exploit synergies arising from the integration of
the selling company into the acquirer’s company.
- TCDG’s clear and deep business understanding (financial and technical)
invariably puts us in a strong, controlling position during negotiations.
Strategic Alliances
A corporate alliance is a business relationship
between two companies established to enhance
the potential for growth and profitability of each
party.
- A corporate alliance is appropriate when
there are strategic gaps in critical capabilities
that are either too capital intensive or
too time consuming to develop internally.
- More often than not a company cannot
afford to build capabilities against all
aspects of both the innovation and the
activity streams. Alliances are an excellent
solution to fill these critical gaps where the
company lacks the resources and/or the time
to build its own capabilities to superior
levels.
The TCDG Advantage :
- A successful alliance needs in-depth
understanding of all aspects of the
business. TCDG with its years of
experience within the food industry is
well positioned to identify, evaluate,
and most importantly negotiate a
suit able structure of the alliance.
- With TCDG’s assistance in carefully
crafting alliances companies can
successfully fill critical capability gaps
and enhance their competitive position
while staying within the realities of
their resource constraints.
CASE STUDY
- Situation: A California
agri-coop, at one time one of
the largest in its industry, was
suffering severely as its industry
continued to undergo
momentous changes.
- Problem: Due to external
changes in the industry,
revenues were 1/3 of former
l evels; the balance sheet was
upside down; and plant ran at
45% of capacity.
The commer cial bank wanted
out because the debt could not
be serviced.
- Solution: We structured a
multi-faceted strategic alliance
between the agri-coop and one
of the world’s largest
commodity companies.
- Benefits: The alliance enabled
the agri-coop to increase plant
utilization to its max, develop
new national and international
markets for its products, obtain
grower financing, and a new
and more flexible commercial
bank financing.
Strategic Financing
Strategic Financing is equity
or debt, or any combination
thereof, provided by a source
with which there is a business
synergy. It generally accompanies
a corporate partnering
relationship.
- The recipient is able to
leverage its competitive
advantages to obtain
stra tegic financing on a
favorable basis through:
greater flexibility in
structure, terms and
pricing, and the highest
possible asset and
share valuations.
- The financing source
recognizes an opportunity
to achieve a higher return
on investment with lower
risk. This results from: an
awareness of possibilities
of additional new areas of
business and an ability to
recognize off balance sheet
values (such as brand
recognition, customer
base, market positioning,
distribution channels, etc).
The TCDG Advantage:
- TCDG utilizes its
understanding of industry and
market dynamics to identify
special corporate partnering
opportunities and to create
advantageous strategic
financing arrangements.
- We bring off-balance sheet, and
intangible assets to the
forefront; assist both companies
in developing new profit centers
and create financial expectations
that did not previously exist.