Baker Tilly Berk advises on Bosch Automotive | TTA deal

27 August 2015 Consultancy.uk

Bosch in the Netherlands has acquired the software and engineering business of TTA International. Baker Tilly Berk, the Dutch member firm of Baker Tilly International, acted as the lead advisor to seller TTA, while buyer Bosch was supported by law firm AKD.

TTA International was founded in 1987 and initially focussed on providing technical training to automotive importers, and later on similar L&D activities to car- and motor manufacturers. In the 90’s the firm diversified into software and engineering services, with a focus on the creation of wiring diagrams, which are used for diagnostic purposes. TTA currently employs 130 people in the Netherlands and Germany, and also has offices/alliances in Antwerp, New Delhi, Rome and London.

In line with TTA’s aims to concentrate on its core training business, the company has divested its software and engineering practice to Bosch’s automotive business. As part of the deal – for which financial terms and conditions have not been disclosed – twenty professionals will transfer to Bosch Automotive Aftermarket, based in Breda, the Netherlands. The transaction is still subject to regulatory conditions, and is expected to be cleared by the end of the summer.

bosch, tta

With the move, Bosch significantly expands its diagnostics portfolio for the automotive industry. “The software and engineering services business from TTA complements our business very well,” says Uwe Thomas, President of the Bosch Automotive Aftermarket division. “With this acquisition we can continue to put our strategic aim of expanding our service and wiring portfolios into practice,” he adds.

Seller TTA International, who was advised by corporate finance experts from Baker Tilly Berk during the transaction, will going forward re-focus its activities to learning & development, the DNA of its business. Robbert d’Hont, Director Learning Solutions at TTA International, comments: “This is a great opportunity for all of us at TTA. While the acquisition by Bosch [advised by lawyers from AKD] greatly enhances the opportunity for the engineering activities it definitely enables us to move ahead and take the next step in reaching our full potential when it comes to the development and delivery of learning solutions.”

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8 tips for successfully buying or selling a distressed business

18 April 2019 Consultancy.uk

Embarking on the sale of a business is one of the most challenging experiences a management team can undertake. Even serial dealmakers acknowledge that the transaction process can be gruelling, exposing management to a level of scrutiny and challenge through due diligence that can be distinctly uncomfortable.

So, to embark on a sale process when a business is in distress is twice as challenging. While management is urgently trying to keep the business afloat, they are simultaneously required to prepare it for scrutiny by potential acquirers. Tim Wainwright, an experienced Transactions Partner with Eight Advisory, says that this dual requirement means sellers of distressed businesses must focus on presenting their business in a way that supports buyers in identifying value, whilst simultaneously being open about the causes of distress. 

According to Wainwright, sellers of distressed businesses should focus on eight key aspects to ensure they are as well prepared as possible:

  • Cash: In a distressed situation cash truly is king. Accurate forecasting and day-by-day cash balances are often required to ensure any buyer is confident that scarce cash reserves are under proper control. 
  • Equity story and turnaround plan: Any buyer is going to want to understand the proposed turnaround strategy: how is the business going to enact its recovery and what value can be created that means the distressed business is worth saving? Clear presentation of this strategy is essential.
  • The business model: Clear demonstration of how the business model generates cash is required, with analysis that shows how financial performance will respond to key changes – whether these are positive improvements (e.g., increases in revenue) or emerging risks that further damage the business.  Demonstrating the business is resilient enough to cope with these changes can go a long way to assuring investors there is a viable future.
  • Management team: As outlined above, this is a challenging process. The management team are in it together and need to be consistent in presenting the turnaround. Above all, the team needs to be open about the underlying causes that resulted in the distressed situation arising.  A defensive management team who fail to acknowledge root causes of distress are unlikely to resolve the situation.

8 tips for successfully buying or selling a distressed business

  • Financing: More than in any traditional transaction, distressed businesses need to understand the impact on working capital. The distressed situation frequently results in costs rising as credit insurance becomes more difficult to obtain or as customers and suppliers reduce credit. Understanding how these unwind will be important to the potential investors.
  • Employees: Any restructuring programme can be difficult for employees. Maintaining open communications and respecting the need for consultation is the basic requirement. In successful turnarounds, employees are often deeply engaged in designing and developing solutions. Demonstrating a supportive, flexible employee base can often support the sale process.
  • Structuring: Understanding how to structure the business for the proposed acquisition can add significant value. Where possible, asset sales may be preferred, enabling buyers to move forward with limited liabilities. However, impacts on customers, employees and other stakeholders need to be considered.
  • Off balance sheet assets: In the course of selling a distressed business, additional attention is often given to communicating the value of items that may not be fully valued in the financial statements. Brands, intellectual property and historic tax losses are all examples of items that may be of significant value to a purchaser. Highlighting these aspects can make an acquisition more appealing.

“These eight focus areas can help to sell a distressed business and are important in reaching a successful outcome, but it should be noted that it will remain a challenging process,” Wainwright explains. 

With recent studies indicating that the valuation of distressed business is trending north. With increased appetite from buyers who are accustomed to taking on these situations, it is likely that more distressed deals will be seen in the coming months. “Preparing management teams as best as possible for delivering these will be key to ensuring these businesses can pass on to new owners who can hopefully drive the restructuring required to see these succeed,” Wainwright added.