Due Diligence
Hood & Strong has experience conducting financial due diligence to help facilitate successful mergers and acquisitions. Working with both buyers and sellers, we analyze target company data to identify historical and projected financial and operating trends, working capital considerations and the quality of earnings. We are focused on helping clients reduce the risks of any transaction by providing technical, financial and operational analysis to support strategic decisions. We offer a suite of services, including evaluating potential acquisition’s financial reporting systems; assessing collateral, accounts receivables, inventory and cash flow; and identifying exposure areas to avoid or reduce value.
Our team has the experience and knowledge to uncover potential M&A opportunities and reduce surprises and transaction delays.
Buy-side due diligence
We work with search funds, independent sponsors, private equity funds, and strategic buyers in acquisition due diligence. Buy-side due diligence includes: reviewing financial statements to analyze the quality of earnings and working capital; analyzing key risk areas; assessing the purchase price; performing tax due diligence; assisting in acquisition structure that optimizes your needs, such as tax efficiency; and providing information about the target company’s tax, compensation and benefit situation.
From valuing the opportunity and understanding all tax implications to obtaining financing, and everything in between, we can support you at every stage of the process to help you achieve success.
Our due diligence approach is collaborative, responsive, and unique. With every engagement, we strive to:
- Maintain active, strategic project involvement from experienced partners.
- Focus and prioritize in critical areas to help manage the timeline and cost effectively.
- Communicate directly and involve you in the process to address issues in a timely manner.
- Leverage our resources through our alliance with RSM and the network of RSM International firms.
- Recommend entity and transaction tax structures that maximize value for buyers and sellers.
Sell-side due diligence
We work with owners and investors directly, or through investment banks and intermediaries, in preparing the business for a potential sale. Sell-side due diligence involves identifying and addressing potential deal breakers early on and validating the accuracy of financial statements, including quality of earnings. We help owners and the investment bank anticipate and address issues and concerns from potential buyers, facilitating a smooth and timely process and thereby increasing the probability of a successful transaction. Specifically, the values we provide to sellers include:
- Prepare seller to develop appropriate negotiation strategies.
- Accelerate time to close and minimize surprises.
- Improve accuracy of financial information (especially when no recent financial audit has taken place), and prepare seller for document requests.
- Identify potential adjustments that could positively impact EBITDA.
- Increase possibility of competition between buyers.
- Minimize impact of taxes on proceeds by strategically structuring deals.
Post-transaction services and advice
Closing a transaction is only the beginning of the real journey. We continue to help buyers and operators post-transaction to ensure a successful transition and continued expansion and growth of the business. As trusted advisors, we help operators in the following post-close:
- Determining opening balance sheet and purchase accounting.
- Working capital adjustment and true-up.
- Evaluation, redesign and implementation of financial management and reporting systems.
- Assessment and redesign of policies and procedures.
- Audit and tax advisory and compliance services.
Exit Planning
After devoting years of your life to building your business, how do you successfully chart and navigate the next chapter of your career and ensure you reap your proper rewards? The key to a successful exit is developing a custom, comprehensive written road map or exit plan well in advance of a sale, buyout or leadership transition, and planning for both the financial and emotional aspects that are inherent in big change.
Hood & Strong’s team of certified exit planning advisors help business owners manage and focus on these complex tasks, advising and guiding you on ways to exit the business on your own terms and conditions in order to maximize value, mitigate tax implications, and ensure a smooth transition. We’re with you through every step of the process, from the time you decide to plan for an exit, through the close of the transaction.