SELL SIDE DUE DILIGENCE:
When a companies or investors make a decision to exit a business or carveout divisions or segments, proper sell side due diligence can increase the likelihood of the deal getting done more quickly and the buyer agreeing with the transaction’s valuation. Cornerstone’s Strategic Partners can help clients have greater control of the transaction process, because we understand the types of concerns and issues today’s demanding buyers are likely to have. Our transaction advisors and sell side expertise can work quickly to address buyers’ concerns and help maximize a transaction’s value, while allowing your organization to stay more focused on running the business.
Our Sell Side Due Diligence Services Include:
- Review of Last Twelve Month Earnings (LTM)
- Analysis of Sales, Revenue and Gross Margin Trends
- Review of intra-company transactions, allocated costs, shared services
- Prepare forecast of carveout business units to be carved-out or entities to be sold
- Quality of earnings assessment to identify “non-recurring” items and potential adjustments
- Bridge analysis of actual to forecasted results and assumptions used for proposed buyers
- Balance Sheet Review
- Develop plans for providing support post-acquisition and during transition.
- Working capital assessment of the carve-out business in order to develop a target working capital amount and mechanism for adjustments in the purchase and sale agreement.
- Analyze and document for proposed buyers the cost structure for fixed versus variable costs, general and administrative expenses and capital expenditures
- Review of material non-recurring and infrequent transactions such as professional fees, severance costs, inventory write-offs and unusual bad debts
- Related party transactions
- Compensation, bonuses and staff levels analysis
- Management team evaluation
- Post-closing purchase price adjustment mechanisms
Cornerstone’s sell side due diligence expertise can provide clients with the confidence they need to know their company is ready for sale and that their financial records and marketing documents provide an accurate and transparent picture of the company. This allows you to be ready when a buyer approaches the company and provides them with the assurances they need to drive the best deal for the shareholders of the firm.