Buy side due diligence
An organisation considering a deal needs to check all the assumptions it makes about that deal. Financial due diligence offers peace of mind to corporate and financial buyers because it analyses and validates financial, commercial, operational and strategic assumptions being made. It uses past trading experience to formulate a view of the future and to assess if there any 'black holes'.
Areas of diligence include revenue, commercial and market due diligence, synergy validation, maintainable earnings, future cash flows, operational issues and deal structuring.
Potential reasons to acquire:
- Strengthening your core business by acquiring new technology or rival products that are almost identical in function / performance to your own
- Building out your current offering by purchasing complementary product lines
- Access to new markets and a wider customer base
- Diversifying country / market risk by acquiring a company with similar products or services in another country
How we can help:
- Enhance your understanding of the target’s business and increase the likelihood of your deal achieving its objectives
- Help you identify and understand critical success factors so informed decisions can be made
- Highlight strengths that can be capitalised on or identify weaknesses which need to be overcome
- Understanding trend of normalised earnings using a Quality of Earnings analysis, identify value levers through a Net Debt & Debt-like analysis and setting a normalised working capital peg to ensure value optimisation
Vendor due diligence and vendor assistance
If your company is up for sale - or you are disposing part of it – you’ll need to show an in-depth report on its financial health to potential buyers - this is vendor due diligence. We help both buyers and sellers (vendors) with an independent view of the business, encompassing its performance and prospects.
Our vendor assistance specialists work alongside your company’s management and lead advisers throughout the process, making sure opportunities and issues are understood and appropriate resolutions are identified.
Possible reasons to divest:
- Your company's strategy involves disposing part of its non-core 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 business 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 help:
- Early identification of value critical issues, providing the option to "regroup and fix" outside the glare of publicity
- Provide vendors with greater control over the sale process and timing of sale minimising business disruption
- Provide buyers with higher degree of certainty over the nature of the business and the characteristics of its cash flow. This helps pricing decisions and assess the level of gearing required
- Adds credibility to figures and information provided in the sales memorandum.
- Minimises the need for multiple buyers requiring substantial access for their own due diligence work
- Vendor assistance specialists helps ensure the vendor retains pace and initiative throughout the sale process