Why Consider Sell-Side Financial Due Diligence?

Selling a company requires careful consideration and due diligence to ensure the transaction is aligned with your business goals. There are many advantages to performing sell-side financial due diligence, including reducing risk, accelerating the transaction, and maximizing the enterprise value.

The value of sell-side financial due diligence:

  • Provides transparency and credibility to the financial information shared with buyers.
  • Reduces risk of surprises surfacing during buyer diligence
  • Experienced diligence professionals support the management team and protect seller interests when handling buyer requests
  • Allows management to focus on running the business during the buyer diligence process to ensure value retention and negotiating leverage
  • Shortens the time needed between execution of the letter of intent and the closing date

The risk of not performing sell-side financial due diligence:

  • Undervaluation
  • Failure to identify errors in accounting during the historical period, such as:
    • Revenue recognition
    • Expense recognition
    • Excessive use of funds for personal use (typically owner related)
    • Accounting for inventory
    • Cash basis versus accrual accounting
  • Lack of understanding of important significant trends (i.e., revenue trends, expense trends, working capital trends, etc.)
  • Failure to identify significant on and off-balance sheet commitments/unreported liabilities (i.e., debt-like considerations)
  • Loss of leverage in post-LOI negotiations

How Centri Can Help

Centri’s integrated approach addresses your needs across the sale process, working with your attorneys, investment bankers and other advisors to identify and mitigate risks. Our process is designed to identify issues, set the narrative, and expand value, all before presenting your business to a potential buyer. Contact us to learn more.

Maxwell B. Heller

Managing Director | M&A Advisory Practice Leader

Max is a Managing Director at Centri Business Consulting and the leader of the firm’s M&A Advisory Practice. He has more than 18 years of merger and acquisition consulting experience and provides M&A advisory services...

About Centri Business Consulting, LLC

Centri Business Consulting provides the highest quality advisory consulting services to its clients by being reliable and responsive to their needs. Centri provides companies with the expertise they need to meet their reporting demands. Centri specializes in financial reportinginternal controlstechnical accounting researchvaluationmergers & acquisitions, and tax, CFO and HR advisory services for companies of various sizes and industries. From complex technical accounting transactions to monthly financial reporting, our professionals can offer any organization the specialized expertise and multilayered skillsets to ensure the project is completed timely and accurately.

Philadelphia
Eight Penn Center
1628 JFK Boulevard
Suite 500
Philadelphia, PA 19103
New York City
530 Seventh Avenue
Suite 2201
New York, NY 10018
Raleigh
4509 Creedmoor Rd
Suite 206
Raleigh, NC 27612
Tampa
615 Channelside Drive
Suite 207
Tampa, FL 33602
Boston
50 Milk Street
16th Floor
Boston, MA 02109
Tysons Corner
1775 Tysons Blvd
Suite 4131
McLean, VA 22102
Denver
8310 South Valley Highway
3rd Floor
Englewood, CO 80112
Centri Everywhere
1-855-CENTRI1
virtual@CentriConsulting.com

11/30/2023

The Importance of FP&A and How Centri Can Help

Introduction Financial Planning and Analysis (FP&A) is a crucial aspect of any...

Read More

11/29/2023

Bridging the GAAP: November 2023

Centri’s Bridging the GAAP newsletter focuses on news, developments, & emerging issues...

Read More

11/29/2023

Valuing Contingent Value Rights in M&A Transactions

Contingent value rights (“CVRs”) remain popular instruments in M&A transactions to help...

Read More