In the business world, it seems that the only constant is change. Companies are spun off, divided, merged, bought and sold, and all of these transactions fall under one of the definitions of mergers and acquisitions. Mergers and acquisitions (M&As) is a blanket term that describes the takeover of one company by another. There…
A prospective company will conduct commercial due diligence in order to fully understand the commercial or economic activity of the target company it is interested in acquiring. More than just a review of the target company’s sales or revenue, commercial due diligence delivers complete insight into market demand, competition, operations and all factors that…
A merger or acquisition is one of the most complex of corporate transactions, requiring the target company to assemble and present for review of hundreds of documents detailing the company’s assets and liabilities. The “sell-side” of a mergers and acquisitions (M&A) transaction describes the deal process from the perspective of the seller and the seller’s…
A joint venture (JV) is a business arrangement in which two or more organizations agree to unite their resources for the purpose of carrying out a specific task. Tasks might include the research and development of new products, selling into a new market, or other operational pursuits. It’s important to note that a JV…
When performing their due diligence, buyers in an M&A or private equity transaction must perform a valuation of the entire assets of the target company. Often, this means employing one or more business appraisal techniques. The most common methods that analysts use to evaluate assets include discounted cash flow analysis, comparable company analysis and precedent…
Firms undergoing a merger or acquisition or seeking capital from private investors should be ready for an operational due diligence (ODD) review. Most commonly used in financial firms, particularly by hedge funds and other investment firms, and in industrial M&A deals, an ODD can also benefit retail organizations and any business. There are many…
by David Weedmark Due diligence is the process of verifying, investigating or auditing a potential investment opportunity to confirm that the investor or buyer has all of the relevant information needed. This is done before the deal closes and, if it’s not done right, may terminate the deal. The Role of Due Diligence in…
Intercompany transactions often carry unique legal and financial challenges for the parent company and its subsidiaries that may benefit from the cash or assets exchanged. Even if both companies do everything “by the books,” with a clear record of transactions, lenders may not look favorably upon intercompany transactions. These types of transactions can also muddy…
When engaged in a complex transaction, such as a merger or acquisition, or when engaged in private equity funding, it’s reasonable to expect that an audit of the target company’s financial statements will take place. The acquiring company or group of investors certainly want the reassurance that the company’s assets and liabilities are properly organized…
The success of a merger and acquisition (M&A) deal isn’t guaranteed after the deal is signed and sealed. The integration period is every bit as crucial to ensuring that the acquiring business is able to achieve the goals it intended to with the transaction. How to ensure this phase of your M&A goes smoothly?…