At KatzAbosch, while we acknowledge that culture and “fit” are of a primary importance, we also understand that the success or failure of a business acquisition can come down to whether or not proper financial and accounting due diligence was conducted. In assisting our clients with an acquisition, we focus our attention not just on analyzing the target company’s financial statements, but also on uncovering relevant information behind the financial statements. We also understand that, in performing due diligence services, time is of the absolute essence.

Our buy side due diligence services can include:

  • Evaluation of the quality and sustainability of the target company’s reported earnings and cash flow, through determining the appropriate “normalization” adjustments.
  • Analysis of the quality of assets to be acquired – for example;
    Have receivables been appropriately reduced for probable uncollectible amounts? Has inventory been reduced as needed for obsolete or unsellable items? Does property, plant, and equipment include any items that should be written down due to value impairments?
  • Assessment of the reasonableness of target company business forecasts
  • Addressing of key financial reporting and tax risks in purchase agreement negotiations
  • Valuation services related to target company intangible assets
  • Advice regarding proper application of purchase accounting under generally accepted accounting principles
  • Evaluation of post-closing purchase price adjustments, such as working capital “true ups”
  • Post closing implementation and consolidation
  • Other services, as needed

Our sell side due diligence services can include:

  • In the 1-5 years in advance of a sale, we can provide consultation regarding the proper structuring of a company and value enhancement strategies, along with exit planning for tax, investment, and estate purposes
  • Analysis of deal structure for cash flow and tax impacts including advice for the best result
  • Evaluation of offers
  • Working with brokers and lawyers or other advisors to manage the data room and manage responses and flow of data to the prospective buyer
  • Assistance with preparing forecasts and projections and normalization adjustments
  • Assistance with preparing responses and schedules based upon buyer requests
  • Working with lawyers and advisors to review and negotiate the terms of the purchase agreement, including working capital requirements and management representation and warranties
  • Referrals to wealth management advisors for post transaction investment
  • Other services, as needed

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