Other buy-side Assistance | KPMG | LT

Other buy-side Assistance

Other buy-side Assistance

Wide range of services for clients acquiring or investing in another entity.

Wide range of services for clients acquiring or investing in another entity.

Pre-deal evaluation

Pre-deal evaluation involves initial assessment of a target company to identify key risks and potential deal breakers, using mainly publicly available information. This analysis is relevant to any client, who is interested in acquiring or investing in another entity and would like to obtain initial information on the target prior to deciding on full-scope due diligence.

Our main assistance provided to potential investors under Pre-deal evaluation includes, inter alia:

  • Analysis of publicly available information relating to the target;
  • Assessment of market and industry attractiveness;
  • Consideration of the target's strengths and weaknesses against industry benchmarks;
  • Identification of key risks and potential deal breakers;
  • Identification of potential market and operational risks and opportunities associated with the target.

Transaction structuring 

We undertake analysis of the considered transaction taking into account financial, accounting, taxation and regulatory issues. As a result of this analysis, we make our recommendations regarding the optimisation of the existing transaction structure or the development of an alternative transaction structure. We prepare, in cooperation with other advisers (e.g. tax specialists and lawyers), an integrated summary of the financial, accounting, taxation and legal documents required in order to implement the planned transaction structure. During our engagement we also assist in:

  • The identification of potential adverse conditions that might result in a break off in negotiations (deal breakers);
  • An evaluation of intragroup cash flows and ability of cash transfer in line with agreed market assumptions (e.g. through dividend payments or intragroup loans);
  • The preparation of cash flow statements, which will be the basis for raising the financing needed by the investor for the considered transaction. 

Contract and completion procedures assistance 

Contract assistance aims to advise on the financial, accounting and tax aspects of the draft sale and purchase agreement related to the acquisition of the target company, including consideration of related risk areas and issues identified based on the previously completed due diligence analyses.

During provision of contract assistance services, we typically focus on the following aspects of the draft sale and purchase agreement:

  • Structure of any price adjustment mechanism;
  • Warranty and indemnity claims from the accounting and tax perspectives;
  • Future plans for add-on acquisitions or divestitures;
  • Accounting principles for closing accounts;
  • Mechanics of closing accounts process;
  • Advice on an appropriate level of normal working capital;
  • Definition of primary financial aspects (including inter alia net debt, normal working capital, EBITDA);
  • Advice on potential issues relating to earn out mechanism. 

Our support to the investors in the transaction completion procedures includes inter alia:

  • Advise in respect of accounting procedures during transaction closing;
  • Support in the preparation of the completion accounts;
  • Verification of the completion accounts (prepared by the target company, by the vendor or by the purchaser) with the objective of assisting in determining the appropriate purchase price adjustments based on the transaction sale and purchase agreements.

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