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.
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.
Improvements to operational performance and managing operational risk are a significant source of both value creation and value protection in a transaction.
Experts from our operational transformation team advise private equity firms, corporates and lenders regarding the robustness of operational business plans, quantification of operational upside potential and operational risks and the design of 100-day plans in due diligence engagements.
Pre-deal operational diligence focuses on the critical assessment of business plans and the identification of upsides. Our focus is on identifying operational efficiencies, cost reduction opportunities and synergies, either as sources of value creation for parties acquiring businesses or when selling businesses, and the communication of these opportunities on behalf of vendors to maximise deal value.
Our team is also skilled in reviewing the operational aspects of business plans on behalf of lenders who require insight and comfort on the operating performance and cash flow of a particular business.
Our operational diligence services comprise:
- Assessment of the operational capability of a target business
- Evaluation of forecast cost reduction and restructuring plans
- Synergy and upside identification
- Assessment of operational risks
- Development of 100-day plans
Members of our team have all held senior positions in industry and the consulting profession and are able to provide a robust challenge and assessment to the operational aspects of business plans based on real world experience. Our team can provide operational due diligence either as a stand alone deliverable or alongside our financial due diligence team to provide complete operational and financial diligence to support a transaction.
Following a transaction we provide post-merger integration, operations improvement and carve-out services to private equity firms and corporates in order to deliver and track benefits arising from a transaction as well as mitigate identified risk issues. Please see Performance Improvement for how we can help you post-deal.
All transactions have a tax implication. FTI Consulting tax specialists deploy effective structuring strategies and commercially focused tax diligence to maximise value opportunities and minimise risk. Our team is experienced in all types of domestic and cross border transactions including acquisitions, disposals, restructurings, refinancings and initial public offerings.
Our team provides expert structuring advice and leading-edge solutions at every stage of the transaction cycle, from the initial due diligence phase through to structuring and SPA negotiation and post-deal implementation. Our team of transaction tax experts can help you to understand:
- How to structure the sale of an asset or a company to help reduce your tax liability and maximise available exemptions and reliefs
- How to structure the purchase of an asset or company tax efficiently with flexibility on exit or refinancing
- How best to deal with historical and future tax exposures in a target in negotiation and deal execution
- How to incentivise and retain key staff via tax and cost-efficient management incentive planning
- How to achieve tax efficient returns on exit
Our team provides tax due diligence to both buy and sell side parties. This can be provided either as a stand alone deliverable or alongside our financial due diligence team to provide complete support to a transaction.
For further information please see Tax Advisory.
FTI Consulting’s valuation group provides corporates and private equity houses with valuation analysis and opinions across all stages of the transaction life cycle. These range from valuation analyses to support M&A appraisals and pricing in the earlier stages of a potential transaction to fairness opinions and purchase price allocations and private equity portfolio valuation reviews following deal completion. As valuation advisers with significant M&A advisory experience, we understand the issues that drive value on M&A transactions.
For further information please see Valuation.
For companies that are planning or already have completed a transaction or have a market position that substantially lessens competition, FTI Consulting can act as monitoring trustee. When a competition authority’s investigation requires parties to maintain the two businesses as viable, stand alone businesses pending the outcome of the investigation, we can provide the monitoring authority and, in some circumstances, manage required divestitures.
Our team provides advice and practical assistance to clients in the sale and purchase of non-core and non-performing loan portfolios.
Our buy-side services include:
- Valuation of loan portfolios in order to identify potential acquisition targets. This incorporates an assessment of commercial issues impacting the individual companies, operational cash flows, debt serviceability and appropriate discount rates
- Preparation of flexible financial models to enable consideration of a range of scenarios and capital structures
- Development of post-acquisition exit and workout strategies
Our sell-side services include:
- Options analysis including portfolio sale techniques, assessment of balance sheet, capital and profit and loss implications, and tax matters
- Transaction execution including portfolio selection, data analytics, investor liaison, data room management, and bid day support