Due Diligence & Business Evaluations

Financial due-diligence

All businesses involved in an acquisition or mergers, as buyers or sellers, must 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 initial expectations.
  • To ensure an efficient sales process, vendors need to present their financial information to potential buyers as transparently as possible. Independent assessment provides potential buyers with certainty about the business and the nature of its cash flow.
  • 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.

Confused or Worried on similar scenarios?

  • 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 can WE 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, this would ensure 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.

Commercial & Market Due Diligence

Any business seeking to make an acquisition needs to understand not only the specific performance of the intended target, but how this relates to projected market conditions and its competition within a specific industry.

  • Making an acquisition means considering not only the merits of an individual business, but also the context in which the business operates. Without understanding the unique qualities of a business sector, it is impossible to arrive at a realistic valuation.
  • A whole range of factors can influence the competitive state of a market. These include technology, customers, legislation, powerful buyers and the emergence of new geographic markets. Each of these needs to be considered for the impact that they might exert on the future value of an acquisition.
  • A potential acquisition may be projecting very high earnings. These need to be validated against data from the market to test their reliability. Equally, earnings projections may be based on the development of new products or markets. These assumptions also need to be assessed against the broader general market.
  • Our understanding of specific markets allows us to assess assumptions and projections and provide efficient, cost-effective services in a timely manner.

Confused or Worried on similar scenarios?

  • You are looking at emerging market opportunities. Effectively developing new business or market opportunities is crucial to staying ahead of competition. However, in order to take full advantage of these opportunities, businesses must have a comprehensive understanding of technologies, customers, trends, legislation and powerful buyers in the market.
  • You are considering acquiring a company, but there is market or competitive uncertainty which may impact the current and future value of the company.
  • You are considering acquiring a company and the revenue/EBIT projections appear to be very aggressive (relative to historic performance) or a significant proportion of the revenue/EBIT projections appear to be based upon the success of new products, customers and/or markets.

How can WE Help?

  • We have carried out more than 50 commercial due diligence and 100 consulting assignments in the UAE itself. The extent of our global reach means that we can help our clients’ spot opportunities and advise them on all the relevant factors to help them establish themselves in the appropriate markets.
  • We can help assemble the teams which they need on the ground and share our in-depth industry and market know-how to identify and address the key issues quickly and cost-efficiently.

Our conclusions are based on well-researched and integrated views on all aspects of the transaction. This translates into a less cumbersome and more efficient due diligence process, meaning your organization may only have one report rather than two or three. Saving your time and cost.

Business Valuation

Valuing all or part of a business requires understanding and analysis of a variety of complex factors. These include both detailed technical knowledge of value drivers and in-depth industry knowledge.

  • Valuing all or part of a business requires input from a variety of specialist advisers who need to understand the value drivers relevant to a particular industry sector alongside the broader strategic aims of the business.
  • In the event of a merger, acquisition or alliance it is vital to understand the value likely to be created through the transaction.
  • The decision to restructure all or part of a business needs to be informed by a comprehensive understanding of the value on each aspect of the business.
  • In the event of a dispute, an independent valuation is likely to help resolve issues swiftly.
  • Operating internationally means that an understanding of the issues driving valuations in different countries is essential. Applying a common methodology across all countries generates a more reliable view of an international business’s value.

Confused or Worried on similar scenarios?

  • Acquisitions, JVs and alliances. Achieving a reliable valuation of a business or asset is the critical driver of a successful transaction for buyers, sellers and potential alliances.
  • Hostile bids. Whether a business is making a bid or defending itself against one, an understanding of the business’s value is critical.

How can WE Help?

  • Our valuation specialists can assist businesses to achieve an in-depth understanding of the value of each business or asset in a transaction. Our leading-edge technical knowledge combined with our in-depth industry knowledge allows us to understand the specific factors driving each individual deal.
  • We have extensive experience of helping both bidders and defenders. Our valuation teams can help prepare a robust defense and we can use our knowledge to analyze the assumptions made by a bidder and build case against them.