Financial Due Diligence & Transaction Support

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.

BDO Consulting 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. Our professionals assess the earnings before interest, taxes, depreciation and amortization (“EBITDA”) used for pricing purposes, and identify the risks related to corporate governance, financial reporting and the accounting environment.

We also represent banks and non-institutional lenders such as hedge funds on matters involving asset-based loans that are interested in collateral, often involving accounts receivable, inventory and cash flow.

Buyers

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.

We focus on facts, trends and behaviors that are critical to the success of a deal, including identifying and analyzing:

• Purchase price adjustments
• Financial abnormalities that skew earnings
• Adequacy of existing management financial information
• Accounting issues affecting current and future earnings (“quality of earnings”)
• Contingent liabilities
• Management capabilities
• Business integration challenges
• Unique technical accounting issues

Lenders

In addition to traditional commercial and asset-based loans, lenders are often active participants in any merger or acquisition. Concerned primarily with the target business’s quality of collateral, BDO Consulting’s financial due diligence services can help lenders assess the collateral supporting a loan as well as the reporting systems that produce the information. We identify and analyze:

• Borrowing base certificates
• Dilution and other collection problems
• Inventory aging and obsolescence
• Projections

Transaction Support

No two businesses are exactly alike, and no single due diligence strategy will satisfy every buyer or lender. BDO Consulting 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
• Assessing personnel trends and requirements
• Evaluating key assumptions and drivers to projections
• Understanding Capex requirements
• Assessing federal, state and local taxes

International Presence & Capability

As a division of the U.S. member firm of BDO International, and with access to BDO member firms around the globe, BDO Consulting is able to deploy resources wherever needed. Our professionals have successfully completed engagements utilizing resources from BDO International in North America, South America, Europe, Asia and other parts of the world.

When it comes to cross-boarder transactions, our professionals have a depth of knowledge in the local business practices, cultures and financial reporting procedures for businesses located in nearly any country.

Our Professionals

BDO Consulting’s professionals have diverse backgrounds and a wealth of industry, financial and operational expertise. They draw upon their backgrounds as former operating executives, and are credentialed variously as certified public accountants, certified turnaround professionals, certified insolvency and reorganization advisors and certified fraud examiners. These restructuring and turnaround professionals provide value by resolving the issues that threaten the future of client organizations. To view a list of our Representative Cases, please click here.

Industry Experience

A division of a national accounting firm, we can draw upon experience across a wide range of industries, including:

Investigative Due Diligence Services

We assist financial institutions, private equity firms, hedge funds, institutional investors, high- net worth individual investors and their legal counsel in identifying and avoiding risks by exposing the concealed elements of prospective transactions and relationships.

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