Bloom Capital’s Strength- Sell-Side Support (In particular, Venture/ Privately Owned Companies)

Bloom Capital has lead numerous M&A transactions to success. In particular, we are most familiar with venture and/ or privately owned companies in the IT/ network industries. There are often times where venture companies making an M&A exit, are sold at values greater than what the normal valuation methods such as EV/ EBITDA Multiple, Net Assets Multiple, and the Enterprise DCF Calculation method suggests. These transactions all have their own unique characteristics, and require a different set of valuation methods. For example, the Discounted Equity Value method, an evaluation technique which is not normally used in Japan, accounts for the new cash flow that will be generated by the synergy when the buyer acquires the target company instead of simply evaluating the cash flow generated by the target company directly. Another method of valuation is using human resources as the source of cash flow. However, note that regardless of the valuation method employed, especially if the valuation method is one that gives an abnormally high Enterprise Value using the special evaluation techniques given in the examples above, the final decision is made by the Key Person on the buy-side (the logic behind the valuation methods is determined afterwards). In conclusion, the actual Enterprise value that is used in an M&A transaction is determined by a combination of various elements and approaches. Possessing the knowledge of Enterprise Valuation and being able to give the appropriate advice to our clients is one of Bloom Capital’s strength.

In small to medium- sized corporation M&A transactions that are privately owned (often the case where a successor is absence), a different set of knowledge, from venture companies are required.
For example, some aspects that must be taken into consideration is retirement taxes, actual EBITDA, evaluation of assets, issues such as how to sustain the organization, promoting development, etc.

TMT (Technology, Media, Telecom) Investment Banking Sector

Bloom Capital is particularly strong in the TMT (IT, Media, Network, Telecom, Mobile Contents, Entertainment games, etc.) sector. Of course, we also provide services to a wide range of industries other than the TMT sector, such as manufacturing industry, real estate, health care, environment, etc. However, by focusing on the TMT sector, we can provide a high value-added service to our clients belonging to the TMT sector.

For example, by specializing in the TMT sector, we are able to exert the following strengths.

Bloom Capital conducts regular interviews with key members within the TMT sector. Hence, we have a good sense of what each player in the market is expecting. For example, when an owner sells their company or business, we are able to predict the optimal buyer and contact them directly without going through a third party. This increases the possibility of success.

In addition, if the company or business for sale belongs to the TMT sector, the process of familiarizing ourselves with the corporation or business is sped up because we are familiar with the field. This gives us an edge in understanding the corporation or business’s non-financial value so we can provide the most appropriate advice.

By utilizing or TMT sector customer network, we are able to provide the necessary information about the company or businesses for sale to potential buyers at an early stage prior to when the company is officially on the market.

For customers belonging to the TMT sector, in utilizing Bloom Capital’s own knowledge and information when constructing an M&A scheme, we can provide a highly valued strategic proposal beyond the customer’s expectation.

Extensive Domestic and Foreign Network

By specializing in the TMT sector, we are not only connected with many venture companies within the TMT sector, we also have many transaction records with clients in the IT, Media, Network, Telecom, Mobile Content, Entertainment games industry.

In addition, we also have contact with many venture companies belonging to the Asia/ Eurasia regions. In particular, countries such as South Korea, Hong Kong, Singapore, China, Taiwan, Vietnam, Indonesia, Thailand, Malaysia, the Philippines, Israel.

Moreover, we also have connections with banks, investment banks, law firms, and accounting firms in these regions. Thus we can provide a thorough cross border transaction support within the Asia/ Eurasian regions.

Swift, Extensive Support, Beyond a Simple Introduction

By specializing in the TMT sector, we are able to implement a high level of execution with the business knowledge that we possess. In addition, our core members all have investment banking service skills, negotiation skills, and they are experienced with executing a wide range of difficult projects such as corporate restructuring, turnaround, MBO, TOB, debt restructuring, etc.

We realize that there is a debate amongst the firms offering M&A support on whether there is a necessity to prepare documentations such as financial projections (a model that is usually 10 pages or so), or an Information Memorandum (IM). As a matter of fact, some firms proceed with the transaction without these materials. In cases where speed is prioritized, it is an option to omit these procedures such as preparing a financial projection, and an information memorandum. However, these materials provide a good insight to the company, and there is a possibility that a lack of these documentations will lead to a great burden on the M&A support side. Hence, it is a general policy at Bloom Capital to avoid these methods of execution if possible.

In the TMT sector, criticism such as “M&A advisors are like M&A amateurs, these firms only introduce their clients and receive the commission and not do anything else” are often heard. Indeed, due to the relatively small transaction sizes in the TMT sector, it is true that professional M&A advisers rarely enter the market. For this reason, our goal is to provide a high value-added service specializing in the TMT sector, regardless of the project size.