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Working Capital Advisory

WORKING CAPITAL ADVISORY:

Cornerstone Strategic Partners knows that long after sellers have finished preparing their companies for sale and buyers have completed their due diligence, the last thing either side wants are for any surprises or issues to arise prior to closing.  All too often, the working capital amount that is to remain with the company at closing isn’t negotiated until the transaction is about to close, even though it may often represent a major portion of the purchase price. 

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Our firm can provide clients with the sell-side and buy-side working capital assistance and support they need to help avoid surprises and the possibility of a delayed closing.  Cornerstone’s transaction advisors can help clients systematically interpret transactional financial data, ensure the purchase agreement language is clear, and validate that the working capital levels to remain with the company post closing are sufficient. 

Our Working Capital Advisory Services Include: 

  • Sell-side net working capital assistance
  • Buy-side working capital assistance
  • Analyzing net working capital during the due diligence phase
  • Calculating average/normalized net working capital
  • Determining the impact of seasonality, inter and intra month swings on net working capital
  • Reconciling working capital “as reported” to working capital “as defined”
  • Establishing working capital targets
  • Determining net working capital requirements on cash free/debt free transactions
  • Reviewing the draft purchase agreement prior to closing
  • Calculating estimated net working capital at closing
  • Reviewing net working capital as initially prepared by the counter party
  • Reviewing post close working capital true-up adjustment items and amounts

Cornerstone Strategic Partners comprehensive working capital advisory framework can give clients the information and analysis they need to make those critical transaction pricing and closing decisions.