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Financial Due Diligence

For Buyers

Mitigate potential risk. Create more value. Close with confidence.

Finding solutions to risk.

Find solutions, not just problems

Our due diligence process goes beyond identifying the risks – we bring solutions and highlight opportunities to create value. We pride ourselves on being first in, last out. Whether it’s before the LOI or after the deal is closed, we’re there, invested in your success.

Every deal is a big deal.

Big Four bench strength with boutique-level service.

We provide end-to-end buy-side transactions diligence, assisting acquirers to identify, evaluate, and execute transactions with precision and confidence. Our services combine deep financial due diligence, sophisticated valuation analysis, and strategic deal support to ensure you capture value, mitigate risk, and negotiate from a position of strength. Partner with trusted advisors who feel like an extension of your team from deal origination through ongoing portfolio management.

Deal Origination

  • Teaser / CIM review
  • Target assessment
  • Initial deal feedback

Deal Strategy

  • Preliminary valuation assessment, including analysis of relevant guideline precedent transactions
  • Provide guidance on deal structuring, terms and price mechanisms (e.g., locked box, closing/completion accounts, deferred consideration)
  • Review of Expression of Interest (EOI) and/or Letter of Intent (LOI)

Deal Execution - Quality of Earnings Reports

  • Financial due diligence
    • Quality of earnings analysis, including assessment of Seller’s proposed adjustments
    • Performance overview and analysis of customers, vendors, margins, operational performance by location, division or geography, cost structure / operating leverage, as well as key performance indicators (as relevant and applicable to financial performance)
    • Net working capital analysis, assess which accounts form the definition of Net Working Capital, analyse trends for potential adjustments, and evaluate the working capital trends to assess the required working capital level to fund day-to-day operations
    • Assessment of net debt and debt-like items including potential off-balance sheet liabilities
    • Assess Quality of Assets including sustaining capital expenditures required in order to support contemplated future earning potential (including growth capital where relevant)
    • Forecast or financial model analysis
    • Assess the Quality of Financial Information and any potential investment required, or recommendations, to meet required reporting standards and best practice post-close
    • Revenue to cash reconciliation, or cash proof, as appropriate (often completed in the absence of audited or reviewed financial statements)
    • Summarize potential buyer considerations and potential post-close improvements to the business
    • Identification and assessment of financial risks, as well as risk mitigation strategies
  • Tax due diligence and structuring
  • Common deliverables
    • Excel databook of financial analyses (e.g., quality of earnings, net debt, net working capital, etc. tailored to your needs)
    • Quality of earnings due diligence reports (“red flags” or comprehensive, tailored to your needs)
    • Financial due diligence reports in support of other transactions (e.g., capital raises, project finance, etc.)

Transaction Process Support

  • Conduct Management / diligence meetings with the Target
  • Roll forward or update of analysis from the initial data provided
  • Meet with potential financiers, representation and warranties insurers, investment committee or board members, as appropriate
  • Hold progress meetings and insights at a cadence of the client’s choosing

Deal Financing / Financial Modelling

  • Preparation and/or review of financial models in support of financing
  • Audit of sell-side financial models and assessment of valuation methodologies
  • Assist in structuring and negotiating financing terms
  • Meet with potential financiers, representation and warranties insurers, investment committee or board members, as appropriate

Closing Support

  • Advise on appropriate price-adjustment mechanisms (e.g., locked box, closing/completion accounts, deferred consideration)
  • Support negotiations and review of key terms from the definitive agreement, as applicable
    • Terms and structure of financing and vendor financing
    • Terms and structure of earn-outs
    • Review of deal definitions
    • Definition of net working capital
    • Treatment of debt and debt-like items
    • Definitions and treatment of transaction expenses
    • Definitions of leakage and permitted leakage
    • Review of indemnities as well as representations and warranties
    • Pre-completion covenants/closing conditions
    • Work with you and your advisors to determine specific provisions that must be included within the definitive agreement
    • Advise on the suitability of the financial representations, warranties and indemnities in the definitive agreement
  • Diligence calls with financiers as well as representations and warranties insurers as appropriate
  • Prepare or review of closing/completion accounts
  • Prepare or review analysis of price-adjustment position
  • Prepare or review dispute/objection notice and provide analyses to support your pricing position, such as an assessment of the strengths and weaknesses of arguments presented
  • Support legal advisors as needed in the event of litigation as well as provide expert services
  • Prepare or advise on the purchase price allocation

Ongoing Post-Closing Support

  • Prepare or review financial models for FP&A, budgeting or bank covenant compliance purposes
  • Purchase price allocations
  • Fractional finance, treasury and accounting support
  • Post-close due diligence mandates – e.g. in situations deal fatigue or lack of quality of financial information leads to not being able to do certain pieces of diligence prior to close, we assist after the fact
  • Ad hoc consulting

Have a deal in mind?

Book a discovery meeting
Our Process

We design a customized scope and extent of due diligence to fit your deal and investment thesis

1

Explore

Reach out to schedule a discovery meeting — an open conversation where we learn about your deal, your goals, and answer any questions. It is your opportunity to see how we work and how we invest in you from the start.

2

Evaluate

We quickly get up to speed on your transaction, offering a complimentary preliminary valuation and deal structure review. Our goal is to ensure your deal aligns with your requirements before moving forward.

3

Engage

Based on your objectives and the transaction specifics, we craft a customized scope of work designed to identify and mitigate risks while uncovering opportunities to create value.

4

Execute

Execute: With a clear plan in place, we dive into problem-solving, providing actionable insights and support to help you close with confidence. We assist in achieving the transaction you want today for the future you are building tomorrow.

Whether you’re talking millions or billions, your deal gets our senior leaders, every time.
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