Sell-Side M&A/Vendor Due Diligence

We provide sell-side transaction advisory services to a full spectrum of family and private equity-owned businesses, as well as public and private global companies.

Key Services

• Historical Financial Analysis – Prepare Quality of Earnings (‘QoE’) analysis with corresponding working capital and net debt analyses.
• Operational Analysis – Evaluate a company’s operations to assess if there is an opportunity to present pro forma adjustments to reflect anticipated operational process improvements.
• Projections – Team with Management to understand key projection assumptions and compare these assumptions to historical performance, as well as anticipated changes in the business to properly pressure test and provide feedback.

Key Benefits of Sell-Side Due Diligence

• Reduce time to close and enhance value
• Validate Management’s adjustments to reported EBITDA
• Identify potential quality of earnings adjustments, including pro forma, operational process improvement and run-rate adjustments
• Prepare data workbook and supporting documentation to facilitate buyside diligence process
• Provide “script” for Management to leverage for discussions with potential buyers
• Reduce Management’s time devoted to transactions, which allows them to focus on continuing to manage the daily operations of the business
• Assess net debt and debt-like items and summarize significant commitments and contingencies
• Assess quality of net assets and assist with the working capital definition and associated calculation
• Identify potential tax exposures, alternative structuring scenarios, and purchase agreement improvements that maximize value to the sellers
• Provide IT/Cyber and due diligence to enhance the deal value

Sample Phases of the Due Diligence Process

The diagram below is indicative of the phases Kroll follows in a typical due diligence process. The timeline for the process is ultimately determined by the seller and investment bank but generally requires approximately – 4-6 weeks until completion of the initial deliverable. After which, Kroll is available to assist throughout the remainder of the sale process, including rollforwards, discussions with potential buyers and general support of Management.