Mergers & Acquisitions (M&A) process optimization
Decisions you make involving mergers, acquisitions, alliances and divestitures can have incredible significance for your utility company. Our experienced professionals can help you ensure your company's M&A process is governed by appropriate controls and procedures. We'll help you build sound monitoring and risk management processes.
PwC's Canadian utilities professionals have deep, industry-specific expertise and access to important insight and information gleaned from our work on a wide range of deals across the sector. We offer:
- Workshops on helpful industry practices
- Reviews of M&A processes, including help in creating a guide for future transactions, tools, templates and lessons learned during each phase of the M&A process
- Implementation assistance, including change management, training and tool development
Valuations for financial reporting
It's vital that you understand fair value measures and the impact they have on financial statements and accounting disclosures. Whether your board of directors recommends a proposed transaction to shareholders can depend heavily on valuation. Your accounting results for operations and/or shareholders' equity can also be heavily influenced as they relate to purchase price allocation and the impairment assessments of intangible assets.
PwC's Deals professionals have significant utilities-sector expertise in international accounting standards and technical valuation. We can help you comply with the valuation-related demands of existing and proposed legislation, including valuations of reserves, contracts and intangible assets, as well as financial and debt instruments.
Fairness opinions and valuations for transactions
A fairness opinion is an effective corporate governance tool for directors charged with the task of protecting their stakeholders' interests-especially where transactions involve multiple shareholders and other stakeholders.
PwC's team of professionals offer independent valuations and advice on the fairness of a proposed transaction from a financial point of view to all or a specific set of shareholders. We can help you identify issues and points of negotiation and value so that you and your shareholders can arrive at an informed decision when facing transactions. These transactions can include significant acquisitions or divestitures, mergers, unsolicited offers for a public corporation's shares, hostile takeovers and other proposed transactions.
Deals can enable utilities companies to seek new capital resources and respond to industry changes, but they can also be costly and bring unforeseen risk.
Our team can help you ensure that all risks are fully known and taken account of. The value of a deal can be significantly altered by utilities regulation — we sometimes see regulators take a tougher stance in allowed cost of capital and achievable cost performances from regulated activities. Our approach also focuses on the underlying health of the target company to better manage transaction risk. To help you understand the target business and increase the likelihood of the deal achieving its objectives, we concentrate on the sustainability of historical and future earnings, cash flows and quality of assets. PwC can help you conduct pre-deal financial due diligence and evaluate the regulatory risks that might affect your proposed deal.
Capturing deal value
Many companies do not reach the maximum value in a transaction because they fail to execute the deal strategy in a timely manner. Successful integration must happen quickly and systematically. Utilities companies can achieve their transition and integration objectives quickly by taking a focused approach to the process.
PwC can assist you with planning, launching and managing the transition and integration effort. We address the immediate concerns of the acquirer over the first 100 days of the acquisition and produce detailed action plans to deliver value from the deal. We also carry out post-deal reviews after six to 12 months to assess whether objectives are being met and if not, how to get them back on track. Our broad knowledge of HR issues allows us to give practical advice on employee management, and we help our clients to navigate the wide variety of employee programs used to choose the best ones for their needs.
Utilities companies preparing for a possible sale or takeover bid can improve their odds of success by focusing on the critical factors driving the sale process. With effective preparation and advice, you can improve the sales price and prevent disruption to your company's ongoing operations.
PwC can work with you throughout the divestiture process, adding a level of scrutiny to financial information to ensure that it sticks throughout buyer due diligence. We address deal financial information and determine standalone audit requirements, separation issues, structural alternatives, and buyer due diligence requirements. We can help you avoid surprises, reduce time to market, and get the most out of your divestitures.
We'll help you analyze specific activities when preparing for a potential sale, including:
- Possible inconsistencies between third-party technical reports and your operational plans
- Your projected capital expenditure plans relative to development plans, including suitable contingencies
- Your projected cash operating costs, measured against industry norms
- Your projected investment return calculations
- Whether or not your management projections can be adequately validated and you can effectively defend forecasts