The acquisition of companies or parts thereof requires, among other things, a comprehensive review of current and historical financial data: In particular, this involves sustainable earning power and liquidity strength as well as the identification of risks and opportunities.
Investors who want to take over companies or parts of companies need reliable and deep transparency on the financial status of the transaction object. This is the only way to ensure objective valuation. The financial reporting of the transaction object must be reviewed in detail and elements relevant for valuation such as adjusted EBITDA, working capital and net financial debt must be documented. Depending on the situation, the analysis of the corporate planning is also part of the FDD.
For time and cost reasons, we recommend dividing the FDD into two phases: In phase one, the focus is on identifying deal breakers as part of a "red flag report". In phase two, a more detailed FDD report follows in accordance with the extended focus agreed with the prospective buyer. In general, added value can result from a holistic understanding of the transaction subject matter, which is why the combination of FDD with commercial and operational due diligence is possible and recommended.
Firstly, we have extensive experience in the financial analysis of companies – around the globe and along the value chain. We rely on structured processes and clear communication, benefitting the often time-critical FDD. Ultimately, we guarantee customers and other stakeholders that we deliver resilient results – thus creating the trust necessary for transactions.
Senior Partner & Member of the Board
Ultimately, the FDD is an essential basis for the decisions of the prospective buyer. Here, we know and take into account the different perspectives of the players involved. The talks and negotiations with the seller's side often show very quickly whether it "can fit" between the parties. Our expertise in critical and challenging situations allows us to identify potentials and risks early on and in a resilient manner. This knowledge thus provides our clients with advantages in terms of bidding competition.
Managing Director
In addition to the pure financial analysis, we are used to developing financial planning models from our project experience. The classic valuation-relevant indicators such as sustainable EBITDA and investment volume, working capital and debt are taken into account here anyway. Frequently, we go one step further in the context of FDD audits and answer the question about the key value drivers, fixed and variable cost structures and the effects of historical growth. This helps investors to develop their own meaningful models, to check the plausibility of planning assumptions and to evaluate scenarios.
Managing Director
