Buy Side
The components of the service are revenue and market due diligence, synergy validation, maintainable earnings, future cash flows, and all operational issues, as well as deal structuring.
Potential issues
- You want to strengthen your company’s core business by acquiring rival 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
Any organisation considering a deal needs to check all the assumptions it is making about that deal. Financial due diligence provides peace of mind to both corporate and financial buyers, by analysing and validating all the financial, commercial, operational and strategic assumptions being made. It uses past trading experience to form a view of the future and confirms that there are no ‘black holes’.
How we can support you
- By enhancing the purchaser’s understanding of the target business and therefore increasing the likelihood of the deal achieving its objectives
- By helping you to identify and understand critical success factors and therefore improve your understanding of all the relevant issues so that informed decisions can be made
- By highlighting strengths that can be built upon or weaknesses that can be resolved
More about Monarch’s financial due diligence services
- Commercial due diligence involves a comprehensive review of the company’s business plan in the context of market conditions and the industry/competition
- Strategic reviews help companies formulate their corporate strategy and diagnose poor performance, providing a basis on which to prepare plans for improvement and to evaluate new markets and potential acquisition targets. In the case of financial institutions, they also help assess the feasibility of business plans.
Sell Side
Vendor due diligence aims to address the concerns and issues that may be relevant to even the most demanding purchaser. For vendors undertaking disposal or selling off a part of their own business, vendor assistance provides bespoke solutions to assist you in successfully completing your divestments.
Our vendor assistance specialists work alongside company management and their lead advisers throughout the process, ensuring that opportunities and issues are understood and the correct steps are taken.
Potential issues
- Your company’s strategy involves disposing of part of the business, whether through a carve-out of business units, or by the sale of existing entities
- Your company is in the process of restructuring/re-focusing its activities
- You want to reposition your portfolio focus on core businesses, or return value to shareholders
- You have started to feel pressure from financiers as a result of deteriorating financial ratios
How we can support you
- Provide vendors with greater control over the sale process and the timing of sale, which can help secure a higher price for the business
- Provide purchasers with greater certainty over the nature of the business and the characteristics of its cash flow. This helps pricing decisions and the level of gearing the structure will support
- Reduce disruption to the business as the sale process is more controlled
- Help add credibility to the facts, figures and information provided in the sales memorandum
- Remove the necessity for a buyer to have substantial access to do their own due diligence work as they will be able to rely on the vendor due diligence report
- Vendor assistance specialists can ensure that the vendor retains pace and initiative throughout the sale process
- Early identification of value critical issues, providing the option to “regroup and fix” outside the glare of publicity
- Rapid execution of the divestment from the point of announcement. This reduces the business disruption and accelerates transfer to new owners
- Reduces uncertainty risk for finance buyers, potentially justifying higher offers
Vendor assistance is potentially more suitable in situations where the likely purchasers are trade buyers and can be less time-consuming than ‘full scope’ vendor due diligence. The key difference between vendor due diligence and vendor assistance is that the latter is provided for the benefit of the vendor only.
More about Monarch’s financial due diligence services
- Vendor due diligence is an in-depth report on the financial health of a company that is being sold. It provides vendors with greater control over the sale process and the timing of sale, which can, in turn, help secure a higher price for the business
- Vendor assistance provides bespoke solutions to assist vendors in successfully completing divestments. Vendor assistance is provided for the benefit of the vendor only
When a company is up for sale – or selling off one of its parts – it needs to show an in-depth report on its financial health to potential buyers. This is called vendor due diligence. Monarch capital provides comfort to both buyers (acquirers) and sellers (vendors) with an independent view of the business, encompassing its performance and prospects.