PJT Accountants & Business Advisors on the Sunshine Coast

Due Diligence

Acquisition due diligence

Acquisition due diligence assesses the risks and opportunities of a proposed transaction. It helps to reduce the risk of post-transaction unpleasant surprises.

It's vital that the results of any due diligence process are relevant to the transaction including:

• valuation of the target and therefore the purchase price
• sale and purchase agreement (e.g. accounting definitions, accounting and tax warranties and indemnities, etc)
• integration plan (e.g. deal synergies).

There are a range of circumstances in which companies can benefit from externally provided acquisition due diligence.

• Where any organisation is considering an acquisition, merger or joint venture.
• Where the organisation or deal manager has limited experience in undertaking due diligence.
• Where existing advisers face a conflict of interest, or are not well placed to undertake the necessary due diligence.
• Where the required due diligence demands technical capabilities and commercial experience beyond the organisation's internal resources.

 

PJT Accountants & Business Advisors can provide acquisition due diligence covering financial considerations (e.g. the integrity of historic and forecast information), tax, commercial factors (e.g. customers, suppliers, markets, competitors), superannuation, IT and human resources.

• Appraising available information about the target and the proposed merged entity to more objectively evaluate the merits of the deal and the valuation supporting the offer price.
• Identifying issues likely to affect negotiations.
• Helping to reduce the risks associated with the deal by identifying and quantifying risks and benefits (e.g. identifying suitable warranties and indemnities for inclusion in the sale and purchase agreement).

 

Vendor due diligence

Vendor due diligence is a thorough, documented due diligence of a business offered for sale. It is paid for by the vendor, but is designed to answer the questions that would be reasonably asked by a potential purchaser.

The vendor due diligence reports prepared and are available for use by potential purchasers as part of their own due diligence. The ultimate purchaser receives the reports as an addressee to form a part of their due diligence materials.

Why would a seller go to the trouble of organising vendor due diligence?

• It simplifies and shortens the sale process, from the time the Information Memorandum is issued to completion of the deal.
• It warns the vendor of potential issues that could complicate the sale, or derail it altogether, allowing the vendor to mitigate these issues before the business is actually offered for sale.
• It can highlight potential opportunities in the business, allowing the vendor to take these into account as part of negotiations with potential purchasers.
• It answers many of the questions a potential purchaser will ask, limiting the need for extensive multiple due diligences by potential purchasers, thereby allowing management to focus on the key deal issues and running their business.
• It gives the vendor more control over the sale process.

 

Our experienced due diligence professionals provide a written report containing a comprehensive analysis of the business for sale, including the key issues and opportunities a purchaser is likely to consider. It explains how the business interacts with its markets and competitors, and examines the key drivers of financial performance.

It covers all the important financial, accounting, tax, IT and commercial aspects of the business to be sold, and is signed over to the purchaser for their use and reliance.

Why select PJT

PJT Accountants & Buisness Advisors can offer you:

• Global quality and consistency
• Advanced methodologies
• Industry knowledge
• Transaction success factors
• Service and performance

 

PJT Accountants & Business Advisors will provide you with an exceptional client service resulting in clear, quality reports focused on the transaction issues critical to the deal.

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Read about more services offered at PJT Accountants:

Business Advisory | Finance Services | Financial Planning | Audit & Assurance | Superannuation |

Due Diligence | Risk Management | Wealth Creation