Sell side assistance - due diligence

 At an early stage of the disposal process and based on the vendor’s request we prepare a vendor due diligence report with respect to the target company for potential purchasers which includes an independent analysis and evaluation of the financial, commercial, operational and tax relating issues of the business.

The vendor due diligence report constitutes a credible, independent report suitable for both corporate and financial buyers and considers typical purchasers’ concerns, including opportunities as well as risks and focuses on key value drivers. As our work is in progress we provide continuous feedback to the target’s management on issues identified during vendor due diligence process.

The key VDD benefits for the sell-side are, inter alia:

• Full control over the type and scope of information being disclosed to potential investors
• An opportunity for more investors to participate in the negotiation process, which should improve the sell–side's bargaining position
• Appropriately early identification of key issues, which allows the sell–side to adjust its negotiation strategy and eliminate identified risks
• Time and resources savings – shorter involvement of the target’s financial and accounting personnel; a single due diligence process instead of separate due diligence processes for each investor
• Time-efficiency leading to faster transaction completion.

Our divestment services cover a range of activities which can be provided to a vendor in relation to a sale process, including the following:

• Carrying out pre-sale analysis and pre-sale due diligence of the business planned to be disposed as well as carve outs of parts of the business for sale
• Assistance in preparation of information memoranda, data rooms and competitive auctions addressing purchaser queries
• Contract assistance services focusing on the following aspects of the draft sale and purchase agreement: preparation of the accounting, financial and tax terms (including consideration and scope of warranty and indemnity claims), structure of price adjustment mechanism, mechanics of the closing accounts process and accounting principles for closing accounts, form of any dispute resolution process, advice on an appropriate level of working capital and issues relating to earn out mechanism. 
   

Our services enable, inter alia:

• Strict control over the divestment process
• Maximum limitation of potential investor interference in the target’s day-to-day business
• Ensuring the transaction occurs in a time and cost efficient manner within pre-determined timeframes.

Pre-sale due diligence

At the beginning of the disposal process and based on vendor’s request we prepare due diligence report usually exclusively for internal use by the seller which includes an independent analysis and evaluation of the business planned for disposal.

Our services relate to assistance for the vendors to identify, address and eliminate financial, tax, operational and market risks and irregularities which may be relevant for prospective investors.

The key benefits of pre-sale due diligence include improvement of negotiation position of the sell-side and faster closing of the transaction (mainly through minimising of the number of issues or irregularities, which otherwise would require explanation to potential investors).

Contract and completion procedures assistance

Contract assistance aims to advise on the financial, accounting and tax aspects of the draft sale and purchase agreement related to the disposal of the target company, including consideration of related risk areas and issues identified based on the previously completed due diligence analyses.
 

During provision of contract assistance services, we typically focus on the following aspects of the draft sale and purchase agreement:

• Structure of any price adjustment mechanism
• Warranty and indemnity claims from the accounting and tax perspectives
• Accounting principles for closing accounts
• Mechanics of closing accounts process
• Advice on an appropriate level of normal working capital required by the investor
• Definition of primary financial aspects (including inter alia net debt, normal working capital, EBITDA)
• Advice on potential issues relating to earn out mechanism.
   

Our support to the vendors in the transaction completion procedures includes inter alia:

• Advise in respect of accounting procedures during transaction closing
• Support in the preparation of the completion accounts
• Verification of the completion accounts (prepared by the target company, by the vendor or by the purchaser) with the objective of assisting in determining the appropriate purchase price adjustments based on the transaction sale and purchase agreement.