Identifying deal breakers and potential issues early in transactions to make more informed decisions.

Identifying deal breakers and potential issues early in transactions to make more informed decisions.

Buy Side Due Diligence

Buying a business can be a time-consuming and complex process for senior executives in addition to their day-to-day responsibilities. As M&A timelines continue to compress, it becomes increasingly difficult to uncover potential issues that could affect valuation, structure, or integration.

Relying on M&A experts to perform financial and tax due diligence provides an efficient and complete set of findings that could impact the outcome of the deal before it is finalized. Stout experts can help identify deal breakers early and limit further resources from being spent. Having an experienced team to analyze the ever-growing amount of data made available throughout a transaction can give senior executives peace of mind prior to executing a purchase agreement.

Our Services

We assist buyers in understanding the key value drivers and risks associated with proposed transactions. Our focus is on identifying issues that may affect quality of earnings, which ultimately impact the valuation and purchase agreement. Our diligence focuses on the following key areas:

  • Quality of Earnings – Analyzing the key drivers of the business and evaluating the quality and sustainability of EBITDA
  • Quality of Assets – Assessing the composition of the target’s net working capital and evaluating the working capital trends and requirements
  • Net Debt – Identifying potential exposures, obligations, and contingencies
  • Other Matters – Analyzing historical accounting policies, quality of reporting/information, quality of finance team, and identifying other potential risks
  • Tax – Confirming the tax classification of the target, which may have a direct impact on the structure of the transaction, including potential cash tax benefits from a basis step-up. Identifying material tax exposures, including sale/use and independent contractor liabilities.

Other Transaction Advisory Services

  • Modeling and advising on structuring alternatives
  • Reviewing draft purchase agreements or other transaction-related documents
  • Assisting with post-closing statements and the settlement of net working capital
  • Assistance with discussion with internal or external parties
  • Advising on remediation plans for identified tax exposures
  • Observing inventory
  • Performing cash proofs

Who We Serve

  • Private equity funds
  • Shareholders
  • Corporate development directors
  • CFOs
  • Corporate controllers
  • Tax directors
  • Corporate boards
  • Lenders

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