Izar Services

Mergers and Acquisitions

Mergers and Acquisitions (M&A) refer to the strategic activities through which companies combine their operations, assets, or ownership to achieve specific business objectives. M&A can take various forms and serve different purposes, including expanding market presence, gaining competitive advantages, diversifying business lines, and achieving synergies to enhance overall performance.

A merger occurs when two companies of relatively equal size agree to combine their operations to form a new entity. The shareholders of both companies typically approve the merger, and they exchange their shares for shares in the new company.

An acquisition happens when one company (the acquiring company or acquirer) purchases the assets or ownership interests of another company (the target company). This can be a friendly acquisition, where the target company agrees to the deal, or a hostile takeover, where the acquiring company bypasses the target’s management and approaches its shareholders directly.

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Types of Mergers & Acquisitions

Takeovers

Takeovers are acquisitions where the acquiring company gains control over the target company, often by purchasing a majority of its shares. This can lead to changes in management, strategy, or operations of the target company.

Divestitures

Divestitures involve selling off a portion of a company’s assets or business divisions to another company. This can be done to focus on core competencies, reduce debt, or address regulatory concerns.

Joint Ventures

Joint ventures are collaborations between two or more companies to undertake a specific business project while maintaining their separate identities. This allows companies to share resources, risks, and expertise.

Leveraged Buyouts (LBOs)

In an LBO, a group of investors or a private equity firm acquires a company using a significant amount of borrowed money, often using the company’s assets as collateral.

M&A can offer several potential benefits, including economies of scale, increased market share, enhanced product offerings, cost savings, access to new markets, and improved efficiency through synergies. However, M&A activities also come with challenges such as integration issues, cultural differences, regulatory hurdles, and financial risks.

The success of an M&A transaction depends on careful planning, due diligence, effective communication, strategic alignment, and post-merger integration. Companies often engage in M&A to achieve their growth strategies, strengthen their competitive position, and enhance shareholder value.

IZAR expertise in Mergers & Acquisitions

Local context and relationships are a major consideration in deal making. IZAR Ltd’s long standing relationships with family offices, private equity funds, & conglomerates in both Mauritius and East Africa leave it well placed to advise and execute transactions on behalf of our clients.

The scope of work we have delivered on M&A transactions include:

01

Indicative valuations and due diligence

02

Sourcing interested and qualifying buyers / sellers

03

Transaction negotiation and agreement of shareholder agreements

Mergers & Acquisitions in Africa

Mergers, Acquisitions, and Equity Capital Market transactions in Africa present their own set of unique challenges, largely due to the diverse nature of the continent’s legal, regulatory, and market landscape. This makes such transactions in Africa markedly different and, in some cases, more complex than those in more developed markets.

A vital component in navigating these transactions is understanding the local context and building relationships. IZAR Ltd stands out in this regard with its longstanding associations with family offices, private equity funds, and conglomerates in both Mauritius and East Africa. Furthermore, the diversity in legal and regulatory frameworks across African nations means companies have to navigate through intricate approvals, compliance measures, and legal requirements across different jurisdictions. Additionally, acquiring a deep understanding of local markets, customer behaviours, and industry dynamics is crucial. Any gaps in this understanding can significantly impact the successful integration of businesses post-acquisition.

One of the substantial challenges, especially for smaller businesses, is securing the necessary financing. This limitation can act as a significant impediment to M&A transactions. However, collaborating with firms like IZAR, which possesses the capability to assist in funding transactions, offers a significant edge. Lastly, clients venturing into the African market should recognise that M&A processes might be more protracted compared to more developed markets, emphasising the importance of patience and perseverance.

IZAR Ltd’s profound expertise in the African business landscape ensures that clients are not only well-prepared but are also equipped to make their M&A endeavours both fruitful and efficient.

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Who we serve

IZAR works with entrepreneurs looking for value addition from their transaction. Maybe it is a partner that can help them break into a new market or with a different skill set, an investor that can help bring additional investors as the company builds towards an IPO, or even a trustworthy partner that has been vetted when they look to break into a new country.

Our focus to date has been working with companies with annual revenue ranging from between USD1m and USD 25m and who are looking to scale up their business.

Transaction Experience in Debt Capital Markets

Project Cadboll Estate

USD 39 million

IZAR Ltd was transaction adviser to Forty Two Point Two on a senior secured AAAMU bond issuance of MUR 1.8 billion in GBP and MUR denominated debt with a 4.5yr maturity. The deal offered an attr...

Project Ardberg

Undisclosed

IZAR Ltd acted as a transaction advisor for an entrepreneurial client who had established the premier direct-selling company in Mauritius....

Project Tamnavlin

USD 15 million

IZAR Ltd served as the exclusive transaction advisor to ABC Banking Corporation Ltd for the subordinated unsecured debt issuance totaling MUR 700 million, structured to qualify as Tier 2 capital under...