MERGERS AND ACQUISITIONS DUE DILIGENCE

Whether you’re buying or selling a business, Accounting Solutions Ltd. can help.

M&A transactions get more complicated by the day. Having a trusted source for verifiable information can save you enormous amounts of money.

The Buy Side

If you’re purchasing a business, we’ll need to go through the last couple of years at least, on the businesses tax returns to separate fact from fiction. Doing this due diligence will normally provide various results.

1 – We may decide that this isn’t a good investment. We also run into situations where the Seller is trying to hide something, not wanting to provide the information we need to make an informed decision.

2 – If the tax returns and financial statements may come out well under examination, this may be an investment that has potential.

3 – The due diligence may also uncover areas where the current management of the entity is doing a poor job of controlling costs or marketing their product. As such, the investment if managed correctly could turn out even better than originally expected.

The Sell Side

If you’re selling a business, we’ll need to go through the last couple of years at least to make sure that everything was done correctly. This should be done before providing any financial statements or tax returns to the other side. Doing this due diligence will also provide various results.

1 – We may decide that the work needs to be amended prior to submission. You never want to send anyone financial statements or tax returns that aren’t air-tight.

2 – At this juncture we may want to postpone the sale until various improvements are made to the enterprises. We may find places where losses can be eliminated or profits can be enhanced, thereby increasing the sales price and marketability of the enterprise.

3 – Once we’ve decided to move forward, we should bring in a Certified Valuation Specialist (CVS) to determine the market value of the enterprise. If that works out as planned, we will certainly need to look at the tax implications of the sale prior to initiating anything.

Whether you’re on the buy or the sell side, we’d love to help. Please click on the Sign Up now button to begin the process.