As financial advisors, we provide tools, analysis, and recommendations to make financial decisions in both private corporations and public institutions.
Shareholders, managers, private investors and regulators have to make decisions in contexts of high uncertainty, making it crucial to have reliable and consistent information. Our job is precisely to provide quality information to make decisions that aid in the mitigation of financial risks and to create value for the organizations we counsel.
Our professional team has solid academic training in economic and financial theory, significant professional experience in the application of sophisticated financial tools for decision-making, as well as broad knowledge of the regulations currently in force in the four countries we operate in, making us experts on economic and financial advice.
- Advice on financial analysis of Public Private Partnership (PPP) projects
We support our clients on all stages of the financial analysis of PPP processes.
Adequate financial analysis of PPP agreements is essential for submitting a bid in a tender, as well as in later stages, if the bid is successful.
During the bidding stage, we prepare the financial model and all other documents required by bidding conditions.
If the bid is successful, we advise on preparation of the final economic-financial plan and the agreement’s financial structuring.
Our methodological approach
Financial models for such projects are complex as a series of variables need to be projected; they include different technical options considering the specifications and conditions, and must adjust to the treatment criteria set by accounting and tax regulations. In sum, the financial model must be correctly parameterized to define the bid price and the debt service coverage required, so as to achieve profitability for the project and its promoters, in line with the associated risks.
Our team has broad experience in preparing financial models, having supported top-tier companies on bids submitted in various tenders under PPP Law (penitentiary, highways, railways, and educational infrastructure).
- Financial structuring
We design financing mechanisms to make the funding of complex operations easier.
We assist organizations in structuring financial instruments including corporate bonds, financial trusts, guarantee and administration trusts, as well as equity interests.
We are the market leaders in Uruguay in the development of public offerings of financial trusts.
Our methodological approach
The structuring of financing mechanisms requires carrying out activities, coordinating agents, and managing information, which requires knowledge and experience about sophisticated financial techniques and risk management.
In this context, our team can act as financial advisor or structurer:
- Definition and selection of alternatives.
- Tax, legal, financial and risk assessment.
- Drafting of agreements.
- Preparation of prospectus.
- Risk rating for issue.
- Filing of issuer with securities market registry.
- Filing of issuer with stock exchange.
- Road show.
- Interest rate calibration for issue.
- Issuance and transaction closing.
Life of issue
- Trust administration.
- Rating update.
- Presentation of financial statements and reports required by regulations.
At CPA FERRERE, together with FERRERE Abogados, we have advised on issuance of the majority of financial trust offerings (and similar transactions, prior to enactment of the Trust Law) placed on the Uruguayan market since 2001.
We provide advice to our clients to seek financing through products with a higher demand in the capital market (mainly AFAPs – pension fund managers) of each of the countries where we operate.
Our work goes beyond quantifying risk, and we propose credit enhancement mechanisms to raise risk ratings to the standards required by the market.
- Mergers and Acquisitions (M&A)
We support our clients for the growth and expansion of their businesses through M&A processes, defining and implementing the best integration strategy.
We collaborate with companies on their M&A processes, supporting investors in searching for and evaluating target companies, as well as companies initiating management improvement processes in preparation for an M&A deal.
Our methodology covers the following aspects:
- Support in the search for potential partners and private investors (venture capitals, private equity funds, etc.).
- Identification of business opportunities.
- Evaluation of investment/disinvestment alternatives.
- Support on strategy definition and deal structuring.
- Identification of potential synergies and opportunities arising out of the business combination.
- Analysis of evolution of the target company’s business sector.
- Elaboration of the financial model to determine the firm’s value range.
- Application of relative valuation methods, using analysis of information on comparable companies in global knowledge bases.
- Collaboration on determining the optimum financial structure and on preparing and analyzing financial information.
- Tax analysis of different business opportunities.
- Legal analysis – preparation of M&A process documentation (confidentiality agreement, memorandum of understanding, purchase-sale agreement, etc.).
- Conducting purchase due diligence (financial, legal, regulatory, operating, technological, tax).
- Collaboration on integration planning, implementation and follow-up.
- Support of change management processes
Given the complexity of M&A processes, it is crucial to perform the analysis from different perspectives. The joint work of the professional teams of CPA FERRERE and FERRERE Abogados in M&A subjects allows clients to have access to advice that covers the following specialties: economic analysis, management, finance, accounting, taxes, legal, etc.
- Investment Project Promotion
We support our clients on maximizing their tax benefits in line with the current investment promotion system in each of the countries where we operate.
In Uruguay, based on extensive experience in presenting investment projects before the Investment Law Application Commission (COMAP), we have developed the following methodology:
- We analyze and suggest the best strategy to apply in project preparation, presentation and monitoring, with a view to access tax benefits in line with the type of project and the current general investment promotion regime and any applicable special regimes.
- We estimate the exemptions to be obtained by the company and evaluate their impact on the investment project.
- We prepare documents, worksheets and other information necessary for developing the project.
- We submit the final document to the Single Investment Window of COMAP and other agencies (Central Bank of Uruguay, Ministry of Labor, Chamber of Industries).
- We monitor the investment project file throughout all stages until obtaining a resolution declaring for the project to be promoted.
We also keep our clients up to date on changes made to the regime, as well as control criteria and subsequent follow-up on projects, holding regular meetings where our professionals analyze and exchange ideas with company executives.
- Investment projects and business plans
We analyze project viability, detecting risks and collaborating on presentations to promoters or investors.
We support our clients on the analysis of the investment project’s commercial and financial viability, the definition of the business model, and identification of risks and mitigation actions. Furthermore, we collaborate on the project’s presentation to promoters, potential investors, and the financial system.
Our methodological approach includes the following steps:
- Analysis of the key factors and processes of the business and support on formulating the strategy for setting it up.
- Advice on organizational/operating model design.
- Support on the search for the right location.
- Identification and estimation of operating costs.
- Business plan financial modeling.
- Identification of critical variables, construction of business risk matrices, and provision of support on defining risk mitigation actions.
- Estimation of financial indicators to evaluate project profitability.
- Financial projections stress analysis by application of simulation models.
- Support on presentation of results to potential stakeholders (investors, financers, government authorities, etc.).
We are a leader in business opportunity analysis. We work together with our clients, identifying and assessing strategic opportunities that maximize firm value.
Our specialists have valuable experience in pre-feasibility studies, preparation and presentation of investment projects and business plans, construction of projection models and financial simulation, company valuation, and design and implementation of structured financing transactions.
We also have a leading economic advisory department consisting of economists and experts with wide experience, devoted to research, providing advice and training on economic issues and quantitative techniques.
- Company valuation
At CPA FERRERE we advise our clients on determining the reasonable value of different-sized companies in different business sectors.
Determining a company’s value is a process that includes analyzing the firm’s economic and financial situation, and the technical estimate of the business’ reasonable value range. It requires experience and knowledge and can include determining the reasonable value of the assets or the net worth of the company as a whole, of a segment of the company, or of an intangible asset.
Based on our experience in this type of work and our access to global knowledge bases, our approach includes the following points:
- Economic and financial analysis of the company or business.
- Analysis of the evolution of its business sector.
- Analysis of the assumptions or hypotheses used in making projections and evaluation of their internal coherence.
- Identification of key factors that can materially affect the business going forward and verification that they have been duly considered.
- Determination of the firm’s estimated value by preparing a financial projections model.
- Estimation of the discount rate at which future cash flows will be updated, based on the company’s business sector.
- Comparison of the value obtained with similar companies, contrasting it with the information contained in global knowledge bases.
- Sensitivity analysis of financial projections.
We have vast experience in determining the reasonable values of companies of diverse sizes and business sectors. Our work in multidisciplinary teams makes it possible to analyze each project from different perspectives (legal, tax, financial, economic, strategic, technological and of processes), which ensures a reliable valuation process for our clients, minimizing the process risks by applying preventive actions.
Additionally, at CPA FERRERE we can assist our clients on the evaluation of alternatives for optimizing reasonable value in restructuring processes, M&A processes, due diligence services, and on the evaluation of strategic alternatives.