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International M&A: best practices

M&A à l'international

Fundraising may be tougher, but opportunities still abound for French companies. How to acquire a target outside France? The experts at AURIS Finance, a consultancy specialising in mergers and acquisitions, give you their advice.

Despite an uncertain macroeconomic environment, acquisition opportunities remain real. French tech companies with sufficient cash are well aware of this. French unicorn Qonto recently acquired its German rival Penta. The move enabled the neo bank to increase its customer base by 20%. The acquisition makes Germany Qonto’s second largest market after France. This first inorganic growth initiative could be followed by others: the group, which is already operating in four European countries (France, Germany, Italy and Spain), aims to increase the number of its customers from the current 400,000 to one million by 2025. However, there are still a number of pitfalls for companies looking to make an acquisition abroad.

Lack of legal and fiscal uniformity

The European Community for Tech Entrepreneurs has just published its “Cross-Border M&A Guide“. This document compiles best practices for acquiring foreign targets, based on numerous testimonials from French advisors and managers who have made acquisitions abroad. It seems that the legal and tax aspects are the most difficult to tackle. Each country has its own specific labour and tax laws. In the case of an acquisition outside France, particular attention must be paid to the capital structure of the target company. “In Spain, the lack of digital share registers was a major challenge. “Each shareholder had to go in person to a notary, sign a power of attorney and pay the corresponding fees to sell their shares,” explains Caroline Noublanche, co-founder of Apricity, a virtual fertility clinic that bought the Woom application.

Putting people at the heart of strategy

Beyond the figures, the complementary nature of the companies and the assessment of the synergies to be achieved, the testimonials all agree on the importance of the human factor. The “intuitu personae” meeting between the two executives is an essential stage. It should occur well in advance of the merger if possible. This initial contact will help to determine whether the various stakeholders want to move forward together in the same direction. Secondly, the dialogue between the teams of the two companies will enable all employees to share a vision of a common future. In an international acquisition, cultural differences between countries come on top of cultural differences between companies. This ongoing dialogue between the various parties must be maintained throughout the acquisition process in order to build trust between the teams. When a new target is acquired, some positions will undoubtedly be duplicated. Again, it is important to be as transparent as possible by raising the issues directly with the teams concerned.

Our experts at your side

For innovative companies, an acquisition outside of France is a project of the highest strategic importance. By their very nature, start-ups are agile companies that are accustomed to rapid change. Their fast growth has meant that they have not been able to build up dedicated in-house finance functions: very few of them have an M&A department. To ensure that their acquisitions are successful, they turn to advisors. AURIS Finance’s experts are specialised by industry. They will support you throughout your merger or acquisition, from identifying international targets to integration.

Contact us.

#AURIS Finance