Experts of Baker Tilly Ukraine and Baker & McKenzie - Kyiv discuss the risks and opportunities of the M&A market for Ukrainian companies

On April 9, 2009, the audit company, Baker Tilly Ukraine, and the international law firm, Baker & McKenzie – Kyiv, organized and conducted a practical seminar entitled "Achieving M&A Benefits through Complete Due Diligence Procedures". The uniqueness and main difference of this event from others of a similar format was that the two companies’ specialists in the legal, finance and tax spheres considered the practical aspects of structuring M&A transactions and described algorithms for the assessment of the tax, legal, and financial risks of business acquisitions. As noted by Alexander Pochkun, the Managing Partner of Baker Tilly Ukraine: "It is crucial to consider the application of Due Diligence procedures in three areas: legal, tax, and financial. Such an approach will help companies to more clearly understand the nature and particularities of their specific M&A transactions". The presenters put special emphasis on the issues of determining the quality of EBITDA and cash flows, analyzing working capital, and managing transaction costs by using the classical procedures of Due Diligence. James Hitch, the Managing Partner and the Head of the Corporate/M&A Practice Group of the Kyiv Office of Baker & McKenzie, emphasized that: "It is of vital importance to consider all of the existing and hidden risks of the successful running of an M&A deal. Due Diligence is a very effective tool for detecting and mitigating those risks." Mykola Stetsenko and Viacheslav Yakymchuk, Partners of the Corporate/M&A Practice Group of the Kyiv Office of Baker & McKenzie, outlined the pros and cons of indirect sales of shares of Ukrainian companies, and spoke on the practical aspects of risk management in an M&A deal. Partners of Baker Tilly in the UK, Paul Johnson and Stephen Mason, shared their experiences in conducting Due Diligence procedures, namely, the classical procedures of Due Diligence adopted in Western Europe. The participants of the training, most of whom were representatives of Ukrainian businesses, had the opportunity to look at their businesses from the point of view of the foreign investor, as well as to understand what expectations foreign investors have with regard to their Ukrainian partners, M&A transactions and consultants. Irina Chernova, Head of Due Diligence and M&A Services of Baker Tilly Ukraine, told about the specifics of Due Diligence procedures conduction in Ukraine and impact of particularities of Ukrainian financial and tax accounting on them. More than 50 representatives of leading foreign and national companies visited the seminar. Many of them requested Baker Tilly Ukraine and Baker & McKenzie – Kyiv to conduct another similar seminar in the nearest future. Reference information: Baker & McKenzie provides sophisticated legal advice to the world’s most dynamic global enterprises, and has done so for 60 years. The first foreign law firm to open an office in Ukraine, we currently assist over 550 multinational companies, financial institutions and major Ukrainian enterprises in their domestic and international operations. Now have one of the largest legal practices in Ukraine, offering expertise (in close cooperation with our offices worldwide) on all aspects of business activities in the region including corporate law, banking and finance, securities and capital markets, venture capital, competition law, tax and customs, real estate and construction, labor and employment, intellectual property, and dispute resolution. Baker Tilly Ukraine is a leading independent audit company, one of the biggest companies in the market of audit services of Ukraine. Baker Tilly Ukraine has rich experience in providing services to the enterprises of chemical, engineering, food, pharmaceutical, woodworking, aircraft industries, fuel and energy complex, transport, construction and development, mass-media, publishing houses, trade companies, governmental and non-governmental organizations. Great experience in various branches of industry, complex approach to rendering services to clients, full range of professional services provided by Baker Tilly Ukraine, allow to realize our potential to the maximum extend and to solve the most difficult tasks. Audit conduction according to Ukrainian and International Standards, tax audit, preparation of financial statements in compliance with IFRS, tax consulting, preparing and accompanying the investment deals, assets valuation, management and financial consulting – these make only a part of services provided by Baker Tilly Ukraine. Representation offices of Baker Tilly Ukraine operate in Kiev and Donetsk cities, but the geographical limits of our activities are much wider. Participation of Baker Tilly Ukraine in Baker Tilly International network permits to offer services to our clients in world financing centers. Baker Tilly International unites 145 companies from 110 countries. The head-office is located in London. Number of employees reaches 24 thousand persons, the global aggregate revenue has increased by 9% and constituted USD 2,5 billion (statistics for June, 2007). Baker Tilly (England) took part in IPO for more than 120 companies in AIM (Alternative Investment Market) of London Stock Exchange and was declared "Auditor of the year" in 2003-2006. Participation in association gives the clients of Baker Tilly Ukraine the opportunity to use the unique branch experience accumulated by Network members. Support is guaranteed to our clients in any of 104 countries of the world having Baker Tilly International offices. Baker Tilly Ukraine is registered in PCAOB (Public Company Accounting Oversight Board), which is non-commercial organization aiming at review of the financial statements of open joint-stock companies. We have been carrying out our activities in the Ukrainian market since April 1999 in accordance with Law of Ukraine "About audit activities, adopted Standards of Auditing and Ethics of International Federation of Accountants European Bank for Reconstruction and Development included Baker Tilly Ukraine into the list of companies having right to provide audit services.