Restructuring & Due Diligence
Baker Tilly financial due diligence approach is geared to mitigating risk and uncovering opportunities in transactions. Whether it is for an acquisition, sale or refinancing, we provide due diligence services tailored to meet your specific needs. We assess the financial and operational performance of the company to validate the buyer’s or creditor’s investment for a particular transaction. This includes verifying the assumptions made when the transaction was negotiated and providing them with data and insight to help formulate a post-transaction plan. As part of the process, we identify transaction risks through analyzing financial performance, synergy opportunities and making determinations about the quality of reported earnings.
Properly assessing the value of potential acquisitions and investments through due diligence can be imperative to the success of a transaction. Quality of earnings concerns, operations, market trends, culture issues and other areas all require a closer look to assess risks and determine a company’s true value.
Our due diligence team have significant experience working with clients to maximize value in a transaction through ensuring a smooth due diligence process. Whether it is for an acquisition, sale, or refinancing, we tailor our due diligence services to meet your specific needs.
Our financial due diligence key services include:
Accounting Practices
We review the accounting procedures for compliance with International Financial Reporting Standards (IFRS), which include assessment of capitalizable expenses, reserve adjustments, unconsolidated related parties, unrecorded audit adjustments, or any non-compliant revenue recognition or inventory accounting practices.
Financial Data Normalization
We will remove the non-recurring and one-off transactions to normalize the financials and help you gain a clearer picture of the normalized cash flow, revenues, and expenses.
Deal Advisory
We will perform due diligence specific to deal-related financial or contractual issues, such as purchase agreement reviews, earn-out calculations, or assessments of debt acquired as part of an acquisition.
Proforma Summary
Where applicable, we provide a complete review and report of activities or events that affect a deal’s profitability and long-term financial viability, including pricing changes, insourcing, or outsourcing trends, assessments of new products, new or closed facilities, new or lost customers, and cost-control initiatives.
Working Capital Review
In a transaction, working capital is generally calculated as the operating liquidity a new owner has after subtracting current liabilities from current assets in the acquired company. We help generate accurate working capital estimates by adjusting for historical business trends and seasonality, reviewing if IFRS have been consistently applied in financial statements, and using this information to make adjustments to a post-closing cash flow calculations. As an integral part of this process, we help companies create a cash optimization plan to enhance profitability, cashflow, and value in a range of situations from acquisition to sale to turnaround and performance improvement. This includes:
- Forecasting cash availability to fulfill principal or interest payments
- Identifying opportunities to generate additional cash inflow or reduce expenses to sustain the business
- Optimizing and accelerating accounts receivable
- Analyzing accounts payable and negotiating favorable terms with vendors
- Providing key operational improvements to accelerate inventory turns and improve operational efficiencies
- Process improvement analysis to track and maintain control of inventory