Buyers, lenders and sellers involved in mergers or acquisitions must identify the risks and the opportunities associated with the business under consideration. Conducting effective financial due diligence can help buyers and lenders structure strategic transactions and avoid costly mistakes. It can also help sellers better understand the strengths and weaknesses of their position pursuant to a deal.
Wegmann Dazet provides financial due diligence and transaction support services to buyers, lenders and sellers in a variety of transactional situations. We assist strategic and financial buyers focused on historic and projected financial performance, developing a more complete picture of the financial realities of a target business by reviewing the quality of earnings, conducting integration assessments and assessing the purchase price model.
In any merger or acquisition, financial due diligence is important not only for negotiation purposes but also to identify future growth opportunities and post-acquisition strategies. Our seasoned professionals incorporate a unique blend of investigative, analytic and financial skills, with a focus on the strategic value of the target business that is the subject of the transaction.
No two businesses are exactly alike, and no single due diligence strategy will satisfy every buyer or lender. Wegmann Dazet customizes its approach to each transaction to meet our client’s specific needs. Some of the more common financial due diligence steps are related to:
- Assessing financial trends
- Understanding EBITDA and unusual or nonrecurring transactions
- Assessing accounting policies and procedures
- Assessing financial reporting and information systems
- Evaluating key assets and related reserves or allowances
- Identifying unrecorded liabilities
- Evaluating working capital trends
- Evaluating loan covenant compliance
- Evaluating key assumptions and drivers to projections
- Understanding Capex requirements
- Assessing federal, state and local taxes