Sell Side Due Diligence
Before an offer is ever agreed to, it is critical for sellers to think like a buyer or investor and to prepare adequately for the rigors of due diligence. Investing in pre-deal diligence is proving a basis for a smooth transition and avoidable questions later on.
Such preparation needs to include the gathering of all key information, in form of composing a Confidential Memorandum, establishing the value by way of a valuation by a third party, accredited valuation firm and having an MIS system performing at top performance to readily provide requested financial information to a buyer.
Within our firm’s well established processes, our team performs such preparation right at the seller’s location – without interference by employees or third parties.
ANA will gather all key information with the business owner and evaluate the company’s documentation and auditing standards. ANA will provide insights into efficiently maintaining reporting systems. We use templates, tools and knowledge based on 15 years of being in business.
ANA will document the organizational structure and technical skill sets of the team and provide an organizational chart. We will compare such structure with previous engagements and recommend hires, changes to the reporting structure, and outsourcing as appropriate.
ANA evaluates the operational aspects of the company that insure continued top performance and will make recommendation respective the marketability of the company to potential investors. This will particularly relate to potential customer or vendor concentrations that conceivably might drive the enterprise value down.
ANA performs financial recasting, compares key metrics against industry standards and will make recommendations for adjustments to exceed performances of peers in the industry. The recasting includes such discretionary items like the seller’s personal expenses paid by the business, extraordinary events like hurricane, or one-time expenses.
Our process is more than a typical due diligence check list. With a detailed two hours, in-person seller interview and an extensive financial review, it goes far beyond. This ensures a review of all factors in the business relevant to each area assessed.
Moreover, typically ANA will sit on the seller’s side of the table in each and every meeting, interpreting complex due diligence questions to make them understandable to a business owner.