Buy side due diligence
Any organisation considering a deal needs to check all the assumptions it makes about that deal. Financial due diligence offers peace of mind to both corporate and financial buyers because it analyses and validates all the financial, commercial, operational and strategic assumptions being made. It also uses past trading experience to form a view of the future and ensure there are no 'black holes'.
Service components include revenue, commercial and market due diligence, synergy validation, maintainable earnings, future cash flows, all operational issues, and deal structuring.
Potential issues you may be facing:
- You want to strengthen your company's core business by acquiring rival products that are almost identical in function/performance to your own.
- You need to build on your company's existing activities by purchasing complementary products.
- You want to purchase a company to gain access to its existing products in new markets, or to increase your customer base.
- You need to expand your company's current portfolio of products and services through the acquisition of new ones - potentially to provide a hedge against the movements in the markets in which the company operates.
- You want to spread your company's market risk by purchasing a company providing similar products or services in another country.
How we can help:
- Enhance purchaser's understanding of the target business, which increases likelihood that deal will achieve its objectives.
- Help you identify and understand critical success factors to improve your understanding of all relevant issues so informed decisions can be made.
- Highlight strengths that can be built upon or weaknesses that can be resolved.
Vendor due diligence
If your company is up for sale - or you are selling off one of its parts – 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 management and your lead advisers throughout the process, making sure that opportunities and issues are understood and the correct steps are taken.
Potential issues you may be facing:
- 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 help:
- Provide vendors with greater control over the sale process and 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 need 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 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.
- Reduce uncertainty risk for finance buyers, potentially justifying higher offers.
Dealmakers should consider value drivers and risks to all aspects of their business when executing their deals. Our Deals capabilities help clients address a wide range of business issues.
Acquisitions that grow enterprise value
M&A is one of the quickest paths to growth. But it’s not the surest, and too often, stakeholders do not get the enterprise value promised from the deal. Deals are inherently complex and laden with risk, whether they occur domestically or in a foreign market. Valuations are complicated by clarity of cash flows, complex accounting rules and tax legislation. And integrations are difficult to execute. So how can you be confident your deal will deliver value to stakeholders?
Dealmakers should consider value drivers and risks to all aspects of their business when setting their M&A strategy and when doing their diligence on the deal. Take into consideration market dynamics and do business-wide diligence across costs, revenue, systems, talent and compliance to best position yourself to deliver value from your transaction. Make sure you understand which risks are inherent, which ones are avoidable, and where you can negotiate value. You’ll be able to make better decisions around optimal market entry options, be more powerful in your negotiations and anticipate or avoid risks that can happen post-close.
The result can be worth it — a seamless execution of your deal, synergies captured during your integration, and value delivered to your stakeholders. And strategic corporate objectives met.
We knows deals. Let us work with you to enter the right deals confidently and help you deliver what you’ve promised.
Explore our focus areas and capabilities.