Financial due diligence

All businesses involved in an acquisition, as buyers or sellers, need to ensure that the financial information they hold is as accurate as possible, not only to prevent paying too much (or in a seller’s case receiving too little) but also to ensure that their governance and risk management objectives are met.

From the buyer’s perspective the quality of information available about a potential acquisition determines the ultimate success of a transaction. Without ensuring that the financial statements about a business reflect the reality, a deal may deliver less than first impressions suggest.
To ensure an efficient sales process, vendors need to present their financial information to potential buyers as transparently as possible. An independent assessmentprovides potential buyers with certainty about the business and the nature of its cashflow.
Financial due-diligence can help to identify and focus attention on the factors in the business that will be critical to its future success.
Public company boards’ governance responsibilities require them to ensure that all steps possible have been taken to identify any problematic issues in a potential acquisition.

If this is your situation

You want to strengthen your company’s core business by acquiring rival or complementary products.
You want to purchase a company to gain access to its existing products in new markets, or to increase your customer base.
Your company’s strategy involves disposing of part of the business, whether through a carve-out of business units, or by the sale of existing entities.
Your company is in the process of restructuring/re-focusing its activities.
You want to reposition your portfolio focus on core businesses, or return value to shareholders.
You have started to feel pressure from financiers as a result of deteriorating financial ratios.

How TPG can help

By enhancing the buyer’s understanding of the target business and therefore increasing the likelihood of the deal achieving its objectives.
By helping buyers to identify and understand critical success factors so that informed acquisition decisions can be made.
By providing purchasers with greater certainty over the nature of the business and the characteristics of its cash flow. This helps pricing decisions and the level of gearing the structure will support.
By providing vendors with greater control over the sale process and the timing of sale, which can help secure a higher price for the business.
By helping you to reduce disruption to the business as the sale process is more controlled.
Our vendor assistance specialists can ensure that the vendor retains pace and initiative throughout the sale process.
By assisting with an early identification of value critical issues, providing the option to “regroup and fix” outside the glare of publicity.
By providing rapid execution of the divestment from the point of announcement for vendors. This reduces the business disruption and accelerates transfer to new owners.