Buy-side and Vendor due diligence

When considering an acquisition, the buyer needs to check all the assumptions it makes about that business. If your company is up for sale (or you are selling off one of its parts), you need to show an in-depth report on its financial health to potential buyers - this is vendor due diligence.

 

 

Market position

All businesses involved in a buy-side acquisition need to ensure that the financial information they hold is as accurate as possible, not only to prevent paying too much in a buyer's case, but also to ensure that their governance and risk management objectives are met.

Revenue

As deals are inherently complex and laden with “hidden” risk, stakeholders do not always get the Enterprise Value anticipated from their Transaction. This is due to the inherent “information gap” between buyers and vendors in every deal. You can mitigate risks, bridge the information gap and maximise returns on deals by commissioning a financial due diligence. 

Potential issues

  • Your company's strategy involves disposing of part of the business, whether through a carve-out of business units, or by the sale of existing entities
  • Your company is in the process of restructuring/re-focusing its activities
  • You want to reposition your portfolio focus on core businesses, or return value to shareholders
  • You have started to feel pressure from financiers as a result of deteriorating financial ratios.

 

 

 

How we can support you

  • Provide vendors with greater control over the sale process and the timing of sale, which can help secure a higher price for the business
  • Provide purchasers with greater certainty over the nature of the business and the characteristics of its cash flow. This helps pricing decisions and the level of gearing the structure will support
  • Reduce disruption to the business as the sale process is more controlled
  • Help add credibility to the facts, figures and information provided in the sales memorandum
  • Remove the necessity for a buyer to have substantial access to do their own due diligence work as they will be able to rely on the vendor due diligence report
  • Vendor assistance specialists can ensure that the vendor retains pace and initiative throughout the sale process
  • Early identification of value critical issues, providing the option to "regroup and fix" outside the glare of publicity
  • Rapid execution of the divestment from the point of announcement. This reduces the business disruption and accelerates transfer to new owners
  • Reduces uncertainty risk for finance buyers, potentially justifying higher offers.

 

 

Contact us

Raimonds Dauksts

Director of Deals, PwC Latvia

Tel: +371 67094400

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