Due-Diligence


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Due Diligence

Buy Side Due Diligence

While reflecting upon the idea of finalizing any deal, it is recommended to evaluate and assess all financial and Tax risk associated with investment mindfully. An unbiased financial due diligence is mandatory as it analyses and validates all financial and strategic aspects of the deal. It employs past trading experiences to predict the future and ensures that there are no 'loopholes'. Further, it provides the going forward EBITDA on a sustainable basis on the basis of certain assumptions.

PRANV & Associates assists you in identifying key business drivers, KPIs, value adjustments and other significant matters. This helps to ensure that you make an informed decision on the transaction.

Enriching the purchaser's understanding of the target business and therefore increasing the possibility of the deal achieving its objectives.
Helping you in recognizing and addressing vital success factors so that improved knowledge can lead to improved decision making skills.
Illuminating the strengths in the process that can be multiplied
Eliminating the loopholes that pose a threat to profit-generating activities.
Helping you identify:
- Quality of Earnings adjustments (QOE), ie. Going forward EBITDA on sustainable basis on standalone entity level;
- Potential debt-like items; this is done by highlighting critical off-balance sheet liabilities, like commitments and contingencies or other significant items that may affect value and crystallize in near future.
- working capital trends and adjustments - Analysis of working capital levels of the company, the cash-flow impact of movement in the working capital levels, an estimation of benchmarks, and the potential adjustments needed to assess the normalized level of working capital required to run business.
- Pending tax assessments and litigation from a direct and indirect tax perspective.
- Areas where specific indemnities and warranties may need to be obtained

Vendor Assistance and Due Diligence.

The key difference between vendor due diligence and vendor assistance is that, unlike the former, the latter is provided for the benefit of vendor only.

Vendor assistance is suitable where the potential purchasers are strategic buyers. It can be more effective than 'full scope' vendor due diligence. Vendor due diligence is carried out by the sellers for the comfort of buyers and mainly done when potential buyers are Private Equity players.

PRANV & Associates can support you by:

providing the vendors greater control over the sale process and the timing of sale.
providing the purchasers greater certainty over the nature of the business and its characteristics.
helping add credibility to the facts, figures and information provided in the sales memorandum;
ensureing that the vendor retains pace and initiative throughout the sale process;
identifying important critical issues early, providing the option to "regroup and fix" outside the glare of publicity.
reducing the uncertainty risk for finance buyers, potentially justifying higher offers.
identifying upsides and clearly articulating the value.
minimizing disruption of business and its management, which saves time, money, and aggravation.

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