The potential buyer of a business needs to understand the financial dynamics and validate the financial assumptions being made about the business before negotiating a deal. By analysing and validating the core assumptions, we seek to provide knowledge to buyers and their funding partners that the financials ‘stack-up’ which reduces unwelcome surprises and increases the likelihood of a transaction achieving its investment thesis.
We assist potential buyers in assessing price, funding requirements and other financial matters which need to be considered in the sale and purchase agreement. Our work includes a comprehensive analysis of the key drivers of business performance, quality of earnings, cash flows, working capital and net debt. We input into your deal negotiations providing a valuable cross-link from the financials to the sale and purchase agreement.
Our experts assess whether generally accepted accounting principles have been consistently applied and determine the accuracy of financial statements. We have partnerships with lawyers and clients to negotiate favourable settlements and resolve earn-outs. We also act as independent arbitrator for disputes related to earn-outs and working capital adjustments.
Vendor financial due diligence is commissioned by the seller and presents an independent in-depth explanation of financial information to potential buyers to help them understand the business and its financial performance.
A vendor due diligence report is ideal when there are a number of potential buyers in an auction process and / or when the target is a complex business.
Our vendor financial due diligence greatly reduces disruption; we work closely with Management to produce one central set of financial information and explanations to address the concerns and issues relevant to even the most demanding purchaser. This reduces the necessity for each buyer to have substantial business access to do their own due diligence work as they will be able to rely on our work and allows the seller to remain in control of the transaction for the longest possible period.
Vendor assist is the provision of bespoke solutions to the seller to prepare a business for sale and then once the process is underway to assist management through to conclusion. Vendor assist services are typically commissioned where either experience or resources within a company are insufficient to credibly prepare the relevant financial information or where the available financial information is not consistent across periods, for example:
- Financial information for the sale group may be incomplete – such as in carve-out circumstances
- The underlying accounting standards / basis of preparation of the financial information may have changed
As we work within the transaction landscape day-to-day, we can leverage our experience to efficiently offer solutions to management teams and support them through the sales process.
To realise the full value of a merger, FTI Consulting works with client executive management to assess the feasibility of project plans, benchmarks and timetables. We specialise in keeping the integration on schedule and evaluating the functions of both entities to determine best practices.
We advise clients on all aspects of the lending decision-making process, for both domestic and foreign-based opportunities. The services provided include:
- Reviewing and sensitising cash flow and business plan projections
- Reviewing due diligence, analysing collateral and monitoring portfolios
- Assisting in credit-crisis situations and suggesting troubled-credit alternatives
- Supporting securitisations and providing back-up management services
The tax services team develops pragmatic, workable solutions to help deliver clients’ acquisitions, sales and restructurings and advises on all matters of tax structuring and due diligence. The team draws together a broad range of skills, covering implementation support, financing and treasury management, dividend and cash repatriation planning and group rationalisation. These skills are put into action to enable clients to drive value from their transactions.
Our deal valuation experts work with clients on the sell side to prepare opening balance sheet valuations, perform impairment analyses and assist with enterprise valuation. We also help private equity general partners with valuation of their holdings, including capital adequacy used to facilitate dividend recapitalisations, solvency and fairness opinions.