Before buying a business, make sure the stories, accounting and math add up to ensure you make an informed decision.
Are you looking to expand your business, broaden your geographical reach or diversify what you have to offer?
The process of buying a business can be time-consuming and intense. The key to a successful transition can be summed up in one word: information. After all, due diligence is important for making big decisions. Understanding the financial and operational aspects of the business you’re looking to acquire, as well as the risk involved in the transaction and what you’ll need to finalize the sale, will allow the process to be more secure. Your advisors can make a world of difference between getting the deal done and getting the deal done right.
Buy-Side Due Diligence
One of the first steps you’ll take in an acquisition is buy-side due diligence. This process allows you to ensure all information associated with the deal (financial, operational, tax, IT, HR) is up to date. This way, you can get an accurate picture of what you’re buying, identify opportunities and threats and understand value.
Why You Need a Business Advisor When It Comes to Buying a Business
Business advisors can help with:
Comprehensive due diligence reporting, including a quality of earnings report, quality of revenues and revenue recognition, add-backs and EBITDA adjustments proposed by seller, estimates, normalized levels of net working capital, a proof of cash, diligence regarding tax matters and state and local tax reporting, inventory valuation, earn-out considerations, cyber security, technology limitations and more
A financial analysis to better understand daily operational and financial questions
A forensics examination or background check to uncover the risks and opportunities associated with the acquisition’s employees and former owners
An analysis of tax ramifications of the transaction due to structuring
Eide Bailly Can Help
Eide Bailly knows that each transaction is unique. Whether you’re a strategic buyer, private equity group, family office or lender, we use a customized team approach to assist with each step. Our specialists are well versed in merger and acquisition advisory, tax, valuation, forensics, technology and risk management. This in-depth and diverse knowledge enables us to empower our clients with the information they need. We aim to provide objective, timely and cost-efficient services throughout the buying process.
Here's how we helped one client with the acquisition of a new venture.
Understanding Due Diligence When Buying a Business
Before buying a business, it’s important to make sure the stories, accounting and math adds up. Buy-side due diligence allows you to make an informed decision before you sign on the dotted line. When you work alongside a team of advisors, you will better understand the ins and outs of your potential acquisition as well as the impact it will have on the company you’ve worked so hard to grow.