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JULY 2014


Transactions


WAA and Chosen Communications merge Commercial Due Diligence Provider:


67


We speak to Simon Rhindtutt MD of Relationship Audits & Management about their involvement in this deal.


When making a decision to invest in a business, any acquirer will naturally undertake financial and legal due diligence. However, the current state and future prospects of the business are usually taken on trust.


Furthermore, most vendors often tend to be optimistic about the potential of their existing client/customer base, which may not represent an accurate picture of the real state of play.


Relationship Audits & Management (RAM) are Advisor insight


RAM gathers actionable intelligence on the true state of relationships using market proven, proprietary tools, (using one to one interviews and on-line assessments) supplemented by sensitive and highly attuned interpretive/evaluation to identify optimum courses of action.


What were the main challenges and complexities regarding this transaction?


1. Speed – the research, analysis and recommendations had to be completed in a few weeks


2. Trust and respect of vendor – quickly building confidence with the management of the vendor


3. Confidentiality – ensuring that the vendors staff and customers were not aware that they were potentially looking to sell the business


Is this a typical transaction for you? What other types of transactions have you been involved with?


This is a typical relationship diligence transaction for RAM.


We also specialise in; ongoing client relationship audits, supplier relationship audits, win/loss tender


audits, internal relationship audits and business relationship mediation and consultancy.


Which sectors do you specialise in


Our specialism is across all business to business companies who need to evaluate key strategic relationships.


We are doing a lot of work with; financial services, professional services, healthcare and marketing services organisations.


How has this transaction differed from your previous work?


Whilst every relationship has its peculiarities, this was not an unusual transaction for us.


What are the benefits of relationship diligence?


Our clients tell us that conducting a relationship diligence audit has multiple benefits;


• Saving the expense of legal and accountancy fees on deals that are not worth taking beyond Heads of Agreement


• Providing detailed intelligence on each relationship


• Pinpointing how “committed” each client is to the vendor


• On completing the deal, enabling the acquirer to focus on potential opportunities and issues


• Identifying likely future spend and business prospects of key clients


• Being able to measure the vendor’s performance against our industry benchmarks


• Identifying from the acquirers clients’ perspective, the key people on their business that need to be retained


• Identifying if the relationship is with the vendor company overall or actually with one or two key people – and if they need to be “locked in” as part of the deal


• Assessing the cross selling opportunities within the vendor’s company and within the acquirer’s company / group


• Building RAM’s intelligence from the audit into the final negotiation


• Finally, through conducting the relationship diligence exercise RAM will work closely with the vendor; from being briefed, setting up and arranging meetings and in some cases providing interim feedback. This enables RAM to provide a view on what they are like to work with and a perspective on what they will be like to manage in the future. LM


www.lawyer-monthly.com


specialists in the measurement of risk associated with business relationships and identifying the opportunities to maximise greater value from them.


They are a highly experienced international consultancy based in London and conduct over 30,000 business relationship assessments a year.


RAM’s Relationship Diligence (client referencing) provides the acquirer with intelligence into the true state of the vendor’s commercial


relationships and prospects for the company in which it is investing.


And, for those selling business, they provide an independently audited report on the quality of key client relationships prior to sale.


Their clients tell them that this provides them with a real-time and accurate picture of key stakeholder relationships that enables senior management to focus its time in reducing the risk of losing business and maximising synergies and opportunities to grow existing customers.


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