A thorough understanding of the industry involved is needed in order to plan an M&A project. A realistic project can be proposed and created only if you have the depth of knowledge in the target industry required for the project, including the realignment trends in the industry triggered by technical innovation and the history and strategies of the companies as well as the personalities of the chief officers. At RECOF, we make sure our professionals specialize in one industry and commit to that industry for the long term, honing the needed skills to plan an M&A project.
M&A projects come to life by the timely information available. Yet the strategic information and needs of a company, such as information on plans for a merger or sale of business, are treated as strictly confidential within a company and shared only by top level management. Companies only let us know about their M&A needs and related information when we cultivate close, trust-based relationships with their managements. All of the information and data on M&As they disclose to us is extremely valuable. Over the past 20 years, RECOF has built up a unique, trust-based network with people in the management positions of many companies, from small and medium-sized enterprises to some of Japan's leading corporations. The number of companies in our network exceeds 20,000. RECOF plans and proposes M&A projects ideally suited to its clients based on this “firsthand information” it collects daily through its network.
The number of mergers and acquisitions in Japan in 1987, the year of RECOF's establishment, was 382, about 16% of the 2,399 M&A transactions in 2008. At that time, M&A was still a foreign concept for many Japanese companies. M&A is now an invaluable aspect of the management strategy for all Japanese companies, but RECOF started to propose specific M&A projects to clients long before M&A became as common as it is today. RECOF will continue presenting our proposals to support M&A strategies for our clients.
RECOF's track record shows that our commitment to projects is not based on the size of the M&A deal but on the strategic significance it holds for the client. It is not the size of the project that makes us work. Our greatest asset is our trust-based relationships with our clients. We plan and execute M&A when it is going to be of value for the client, regardless of its size.
At RECOF, senior management is in charge of projects. Projects are executed by a team of professionals specialized in the industry and experts of finance, valuation, accounting, legal issues, and other skills necessary for the project. We execute projects with a high level of precision only possible by our many years of experience in M&A. Not only do we respond to the discipline enforced by the capital markets in the process of M&A, but we also provide advice on taking care of the various stakeholders involved, keeping in mind that the image of a company as a member of society is very strong in Japan.
In M&A transactions we cannot avoid tough negotiations when there are conflicting differences. However, for M&A to be successful, the top management teams of the companies involved need to form and share a common view of the future of the company and build a strong trust-based relationship with mutual understanding. This is particularly important and essential where two or more companies come together to create a new corporate entity through a merger. The new corporate entity must overcome many issues during the PMI process, and it is important to remember that the trust-based relationship established during the M&A is the starting point of a successful PMI. RECOF executes and supports M&A transactions with a prospect of successful PMI in mind.
