Buyer & Vendor Financial Due Diligence

Our due diligence work focuses on identifying risks, exposures, and opportunities early in the process, focusing on the following areas:

• Understanding the client base and contract terms
• Analysing the profitability and changes over time
• Understanding historical performance of the products and services sold, including comparisons with peers
• Understanding the quality of the target's financial reporting team
• Analysing the target's Quality of Earnings, normalizing EBITDA for periods driving the deal valuation, and understanding run-rate EBITDA
• Analysing the Quality of Assets, debt and debt like items and off balance sheet contingencies
• Understanding historical working capital, cash flow management, and future capital requirements
• Linking historical results to projections/valuation models, scrutinizing the projections and commenting on potential risks in seller's ability to achieve them
• Providing advise on purchase contract considerations (e.g. representations and warranties, escrow/indemnity terms and working capital closing mechanisms)
• Providing preliminary thoughts on the impact of purchase accounting on future earnings