Forensic Transaction Services | KPMG | UK
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Forensic Transaction Services

Forensic Transaction Services

Address key pre-deal risks and resolve post-deal issues

Address key pre-deal risks and resolve post-deal issues

Are you buying or selling a business, or have you recently bought or sold one?

We help clients who are involved in transactions. Buying or selling a business normally comes with significant associated risks attached. These risks must be managed in order to achieve a successful transaction with the desired outcome for both buyer and seller. There are many ways in which we can assist both pre- and post-deal.

Led by experienced staff with significant transactions experience, having worked on more than 1,000 live transactions and more than 100 disputes, we can help in the following areas:

Pre-deal:

We can help a seller with its sale strategy around whether or not a locked box or completion accounts mechanism would be more appropriate, and help the seller and its lawyers present in the most advantageous way the relevant mechanism to the buyer in the draft sale and purchase agreement.

We can help a buyer respond to the seller’s proposed locked box or completion accounts mechanism – assessing the risks to the buyer inherent in the proposed mechanism and suggesting a strategy for dealing with such risks.

We can suggest the appropriate ‘hierarchy’ and assist in the drafting of specific accounting policies. We can review the logic behind the price adjustment mechanism, and on whether we consider it is likely to achieve its objectives.

We can assist in devising an earn-out mechanism, or in testing one prepared by the other party to a transaction. We can assist in ensuring that the agreed upon mechanism is properly reflected in the sale and purchase agreement.

Post-deal:

Completion Accounts: we can help the buyer or seller prepare or review the draft completion accounts. We can help the reviewing party put together a list of disputed items, or the preparing party react to a list of disputed items prepared by the reviewing party. We can assist the buyer or seller in negotiations in the pre-dispute phase. If a negotiated solution is not possible and a dispute is referred to an independent accountant for expert determination, we can discuss the various issues and arrive at a strategy which we consider is likely to be most favourable to our client, and prepare the written submissions and supporting documentation to the independent accountant on their behalf.

Leakage: where there is a locked box mechanism, we can perform the leakage review for the buyer of a business.

Earn-outs: we can help the buyer or seller prepare or review the draft earn-out accounts, in a similar way as with completion accounts.

Expert determination: where we are independent of both buyer and seller and were not involved in a transaction we can act as independent accountant if there is a completion accounts or earn-out dispute, in determining the outcome.

Warranty claims: we can assist the buyer of a business, with the assistance of its lawyers, in investigating whether or not a warranty claim can be made, for example, in relation to warranted financial statements being “true and fair”. If it is considered that there are grounds for a warranty claim, we can assist our client’s lawyers in preparing the case against the seller. If, on the other hand, our client is on the receiving end of a warranty claim, we can assist them in defending themselves.

Misrepresentation: we can assist clients in relation to misrepresentation claims, either in relation to arguments in support or in defence.

Our UK dispute advisory practice, draws on deep knowledge from involvement commercial disputes and dispute resolution, professionals with specialist sector knowledge, plus the reach of KPMG’s 152-country network.

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