Financial due diligence

Overview

An organisation considering an acquisition needs to assess the assumptions it is making about the deal. Financial due diligence provides peace of mind to both corporate and financial buyers, by analysing and validating the financial, commercial, operational and strategic assumptions being made. It uses past trading experience to form a view of the future maintainable earnings, key value drivers, inherent risks in the business and confirms that there are no 'black holes'.

 

Issues you may be facing

  • You want to strengthen your company’s core business by acquiring competitor products that are almost identical in function/performance to your own.
  • You need to build on your company’s existing activities by purchasing complementary products.
  • You want to purchase a company to gain access to its existing products in new markets, or to increase your customer base.
  • You need to expand your company’s current portfolio of products and services through the acquisition of new ones - potentially to provide a hedge against the movements in the markets in which the company operates.
  • You want to spread your company’s market risk by purchasing a company providing similar products or services in another country.

 

How we can help you

  • Assess the business being acquired, relative to your economic and operational objectives, and the assumptions underpinning the deal.
  • Provide you with greater certainty over the nature of the business, inherent risks and the characteristics of the cash flows generated by the business.
  • Help inform your pricing decisions and the level of gearing the structure will support.
  • Reduce disruption to your own business, providing independent insight into the business you are acquiring.
  • Help add credibility to the facts, figures and information provided by the seller and in the sales memorandum, in order to support your negotiations.
  • Identification of value critical issues and financial risks.
  • Reduce uncertainty risk for financial buyers.

 

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Contact us

Peter McCrystal

Peter McCrystal

Director, PwC South Africa

Tel: +27 (0) 11 797 5275

Jan Groenewald

Jan Groenewald

Africa Deals Leader, PwC South Africa

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