Whether you are purchasing your first business or contemplating a strategic addition to an existing business, the importance of undertaking a robust due diligence process cannot be ignored.

Due diligence is an essential part of any business acquisition and PKF is ideally suited to provide a clear and authoritative review. For buyers, our team can conduct the comprehensive review you need to make a well-informed decision about the viability of a proposed sale or purchase. Our independence, experience, commercial approach, attention to detail and objectivity provides increased confidence and supports clear decision making.

Our Approach
We can help you make a well-informed decision about the proposed acquisition through careful analysis of:

• Forecast earnings and cash flows;
• Historical earnings and cash flows;
• Working capital requirements;
• Key business drivers;
• Financial position;
• Accounting policies;
• Financial reporting systems and processes; and
• Tax compliance (from our Tax team).

We can also advise you on specific aspects of the sale and purchase agreement such as purchase price adjustment for EBITDA, working capital and net debt as well as the broader financial aspects of the agreement such as completion accounts or locked box mechanism. We will tailor our reporting to meet your requirements. This may be in the form of a short form report focused on the key issues and risk, a detailed long form report and/or an excel based data book.

Vendor due diligence involves a detailed assessment and the preparation of an independent report on a company which is issued to interested parties during the initial sale process and can be legally relied upon by the ultimate purchaser.

For vendors, we provide:

• Early identification and detailed analysis of key risks and issues for potential purchasers. This gives the vendor the opportunity to ensure they can be mitigated or placed in the appropriate context prior to commencement of the acquisition due diligence process by potential purchasers;
• Increased confidence for potential buyers through the presentation of a detailed financial due diligence report that reduces the cost and time associated for potential purchasers to due diligence.

Vendor due diligence can help to:

• Increase the number of parties that review the acquisition opportunity in detail;
• Reduce transaction costs and streamlining the acquisition due diligence process for all bidders; and
• Potentially increased sale proceeds due to resolution/mitigation of key risk and valuation issues prior to the sale process commencing and the likelihood of more bidders in the sale process.

Our approach includes:

• Independent and detailed financial due diligence of your business;
• Commercially focused advice;
• Immediate feedback regarding issues as they arise;
• Progress reports detailing key risks and issues;
• Identification of the key drivers of the business;
• Identification of key people and contractual issues;
• Report on the significant risks (which may be able to be addressed prior to sale);
• Assistance through buy-side due diligence process;
• Constant communication of findings throughout the process; and
• A complete independent report issued to interested parties.

An integral part of sales processes is to comprehensively prepare and present relevant information about the company for potential interested parties. This is usually done through the information memorandum of the committed M&A advisor.

In order to objectify and if the figures are highly complex, it is appropriate in individual cases to present facts and figures about the company in a so-called financial fact book . With this it is also possible to control the presentation of the financial data and the analyzes derived from it proactively and on your own initiative.

With the financial fact book, PKF's transaction experts also support you with a carve-out, i.e. when parts of a company or group are sold that have not previously acted as legally independent units. Independent pro forma profit and loss statements and balance sheets are to be determined here.

If a company has changed significantly in the recent past, for example through the sale of an important business area, it can usually not be compared economically with previous years. Another instrument, the so-called Like for Like, as an important key figure, ensures more transparency and enables growth figures to be compared, especially in very dynamic markets.

Business valuation is an essential part of corporate decision making in today's fast-paced business world. Value is based on a company's assets and financial circumstances.

We provide technically robust, commercially focused independent valuations to meet specific client needs, with clear, credible, and transparent reports.

Our team combines extensive professional experience, industry knowledge and sound judgement. Across PKF network, we have a team of valuation specialists in key markets in Asia, UK & Europe, North America and South America.

Our Services:

• Valuation advice – professional advice and consultation to management, boards and shareholders on transactions and takeovers
• Independent Expert Reports – for takeovers, schemes of arrangement, reverse takeovers, related party transactions, major acquisitions, and share buy-backs
• Purchase Price Allocation – determine value of identifiable intangible assets acquired and goodwill
• Intangible Asset Valuations – software, technology, customer relationships, supplier relationships, royalties and patents
• Equity issues – advice on the value of equity issued to new shareholders or partners
• Dispute Resolution – shareholder and commercial disputes
• Capital Raising – pricing issuing shares and other securities
• Mergers and Acquisitions – valuation analysis and reports for management, directors and/or shareholders
• Divestments – valuation analysis and reports for management, directors and/or shareholders
• Financial Reporting – unlisted investments and private equity investments as well as goodwill impairment test reviews

PKF assists with the preparation of independent expert reports (IERs) to ensure that a transaction is fair and reasonable with respect to the shareholders that are not associated with the transactions. Also for company’s own investment purposes as feasibility studies and business plans.

Our IERs provide impartial and credible advice to shareholders and companies’ boards. Reports are presented clearly and concisely, containing::

• A summary of the proposed transaction / investment;
• A statement of the purpose and objectives of the report, including a discussion on the presented opinion;
• Analysis of the businesses involved;
• A description of the relevant industries / competitors/market;
• Detailed analysis of the proposed transaction / investment, usually including a valuation of one or more entities;
• An opinion on whether a transaction / investment is fair and reasonable and in the best interests of shareholders / board.

Our experienced team prepares high quality, timely reports. We take our independence seriously and make sure we comply with all regulatory requirements.

Writing a business plan requires very specific information to be presented in a very specific manner. Your business plan not only helps you to plan for the future, but also allows possible funders to get a feel for how realistic your ambitions are and how likely they are to be successful. A business plan is an essential part of setting up a business and it has to be done right.

From the initial visualization stage, right through to getting funded and registered, PKF is here to ensure that the process is as smooth and painless as possible. Choosing the right information to put into a business plan requires a lot of thought, planning and research and we are here to help with that at every stage of the process, whatever the venture, location, industry or size of the project, and either for investment or restructuring purposes.

Working together, we can investigate, design and build a robust financial model for your business.

Challenges
Important business decisions are usually based on financial models with forecasts.  Approximately 90% of financial models contain errors and may exclude key value drivers, which can result in misleading results. Over time most financial models evolve without well-structured design or integrity checks and often without documentation. Making minor changes can often take a long time and have unexpected consequences.

Our Solution
Working together, we can investigate the uncertainties of key business and market drivers, and underlying assumptions. We undertake proper planning in the design and build of the model for longevity, consistency, and practicality, and with a focus on the required outputs. We incorporate version controls and backups, rigorously test the model, build in checks, and protect parts of the model from users making unauthorized changes.

We help organizations reach their decisions regarding strategy, restructuring, financing (debt and equity), grant applications, capital expenditure, mergers and acquisitions.

We have experience in building a wide range of financial models from simple forecast models for smaller businesses to complex long term forecast models (such as project finance) incorporating a wide range of inputs and assumptions for multiple businesses and markets.

Benefits:

• Simpler analysis of complex issues;
• De-risk decision making by identifying key drivers and their financial implications;
• Facilitate sensitivity analysis of any input or variable;
• Ongoing use of robust tailor-made financial models that can adapt as the business and/or markets change;
• Improved visibility of potential future outcomes with our research and forecasting tools.

Being able to fall back on transparent information is a basic requirement for investors, especially in difficult times. This is why lenders often demand an up-to-date inventory of the financial data, especially when compliance with financing agreements is at risk and adaptation measures are necessary.

An independent business review is a suitable instrument for the independent analysis and presentation of the performance and financial parameters of the borrower. It thus offers a meaningful basis for decision-making in order to derive concrete recommendations for action.

Our experienced teams advise you on the preparation of an independent and comprehensive company analysis that enables all parties involved to make a well-founded risk assessment and defines the framework for alternative courses of action. On this basis, lenders and borrowers can redesign the financing structure and conditions as required.

A carefully planned and executed acquisition can be an efficient way to achieve immediate growth and boost the value of your company.

When a company is looking at new opportunities for growth, mergers and acquisitions (M&A) are one strategic card they may be looking to play. However, as the market looks for the next ‘great deal’, organizations should take heed of lessons learnt from previous good and bad M&A transactions.

We undertake discussions with buyers and sellers including private, institutional and global organizations as well as private equity firms, which give us excellent insight with respect to their M&A appetites as well as their acquisition and divestment goals.

Our team across the network has provided lead advisory services on a wide range of M&A deals across many sectors and ranging from small bolt on acquisitions to larger mid-market acquisitions.

We leverage our experience in providing valuation and financial due diligence services to ensure that our M&A advice incorporates technically sound valuation advice and rigorous analysis of financial due diligence issues.

Our services:

• Mergers and acquisitions advice;
• Acquisition target search and screening;
• Industry research;
• Initial approaches to target companies;
• Valuation advice and reports, including provision of formal valuation opinions where required;
• Synergy analysis;
• Advice on the acquisition structure;
• Assist with acquisition funding;
• Appointment and management of other advisors;
• Management of the overall due diligence process (financial, commercial, regulatory and HR, except legal);
• Conduct the financial due diligence process including preparation of financial due diligence reports;
• Lead negotiations with the vendor or support the client as required;
• Advice on the key terms of the acquisition agreement;
• Management of the completion process;
• Integration strategy and planning.

The sale of your business is often the realization of many years’ hard work, focus and dedication. Yet only one opportunity arises to produce a good commercial outcome.

It is critical that you evaluate your options and plan the exit strategy well before you plan to sell. It is equally important to ensure that the business is prepared appropriately for sale. We outline all possible exit strategies to ensure your understanding of how buyers assess value. We also discuss the advantages, disadvantages, and likelihood of success for each divestment approach:

• Trade sale;
• Management buy in/out;
• Private equity sale;
• Generational succession.

We will work closely with you to ensure that your business is sale ready by evaluating and advising you on:

• Stage of business development;
• Financial performance of the business;
• Growth prospects;
• Competitive position;
• Existing financial structure and position;
• Financial reporting and forecasting;
• Corporate structure;
• Existing capital structure.

Once the strategy is determined, we will help you work through:

• The structure of the transaction to maximize the proceeds received post sale;
• Identification of potential purchasers;
• Preparation of an information memorandum for distribution to interested parties;
• Assistance in the preparation of a terms sheet;
• Administration of the sales process;
• Assistance during due diligence and hosting a data room;
• Assistance during negotiation; and
• Administration of the sale and purchase agreement.

The sale of a business requires a great deal of care and preparation. This preparation is essential to the marketing stage and vital to ensuring the accompanying documents are relevant and tailored to the specific requirements of potential purchasers. These elements are all important to ensuring the best possible outcome from the sales process.

Businesses can require additional capital for a range of reasons, including funding new businesses, growing an existing one, or to finance the commercialization of technology or property developments.

We work with businesses to secure capital through arrangements that are strategically aligned with the goals of our clients, assisting you to source the right capital at the right price.

We have excellent working relationships with a wide range of investors and financiers (including private, institutional and global organizations as well as private equity firms), with whom we undertake discussions, which give us excellent insight with respect to their M&A appetites as well as their acquisition and divestment goals.

We advise clients on funding strategies at various stages of the business lifecycle including accessing capital from venture capital; private equity; family office and high net worth individuals plus many other sources.

We can assist in many areas of the capital raising process to improve your chances of a successful capital raising while also relieving your firm of the administrative burden of the process including:

• Valuation analysis and reports;
• Assistance with preparation or refinement of business plans;
• Preparation of financial models;
• Assistance with preparation or refinement of financial forecasts and projections;
• Advice on alternative funding structures;
• Identify most suitable capital providers and make the initial approach;
• Appointment and management of other advisors;
• Preparation of investment teasers;
• Preparation of offer documents – Information Memorandum, Prospectus or Product Disclosure Statement;
• Management of the overall investor/financier due diligence process (financial, legal, commercial, regulatory and HR);
• Negotiate with preferred investors/financiers;
• Advice on the key terms of the funding agreement;
• Management of the completion process.

When listing a company on the stock exchange (either main or secondary), you need trusted, competent and experienced advisors.

The process for seeking capital from the equity capital markets through IPOs and other transactions, and/or from the debt capital markets, requires an approach tailored for the regulatory requirements, as well the process for accessing retail and wholesale investors. Throughout PKF network we have access to MARF (Spain) or IAM (London), for example.

IPO
Before listing you need to consider market and industry stock returns as well as the current strength of the IPO market. Across PKF network, we understand how to prepare and facilitate a successful IPO and will make the process as easy as possible for your business.  We can assist in many areas of the listing process including:

• Valuation analysis and reports;
• Determining the appropriate capital structure for the IPO;
• Preparation of financial models and projections;
• Appointment and management of other advisors and service providers (legal, investigating accountant, share registry, investor relations and printer);
• Appointment of lead manager / underwriter;
• Preparation of the Prospectus or Product Disclosure Statement;
• Management of the due diligence process for the preparation of the prospectus or product disclosure statement;
• Preparation and delivery of investor presentations Preparation of roadshow presentation.

Debt
We have developed a unique primary debt market issuance service that supports and helps companies who rarely appear on the debt capital markets to take full advantage of the efficiency of wholesale funding, just as frequent issuers do, but without having to put in place the additional resources normally associated with it. We leverage on synergies, helping clients to reduce their funding cost and increase operational efficiency.