FTI Consulting is dedicated to performing the highest quality due diligence investigations that contribute significantly to informed decision making by management on either the buy and sell side of a transaction. Also, we work closely with management to ensure that this information – costs, benefits, and risks – is used advantageously to achieve the best possible outcome for our clients.
Our Service Offerings
Buy-Side Financial Due Diligence
The potential buyer of a business needs to understand the financial dynamics and validate the financial assumptions being made about the business before negotiating a deal. By analysing and validating the core assumptions, FTI Consulting verifies for the buyers and their funding partners that the financials “stack-up.” This reduces unwelcome surprises and increases the likelihood of a transaction reaching a successful conclusion.
We assist potential buyers in assessing price, funding requirements and other financial matters which need to be considered in the sale and purchase agreement. Our work includes a comprehensive analysis of the key drivers of business performance, quality of earnings, cash flows, working capital and net debt. We input into your deal negotiations providing a valuable cross-link from the financials to the sale and purchase agreement.
Vendor Financial Due Diligence
Vendor financial due diligence is commissioned by the seller and presents an independent in-depth review of financial information to potential buyers to help them understand the business and its financial performance. A vendor due diligence report is ideal when there are a number of potential buyers in an auction process and / or when the target is a complex business.
FTI Consulting vendor financial due diligence greatly reduces disruption. We work closely with client management to produce one central set of financial information and explanations to address the concerns and issues relevant to even the most demanding purchaser. This reduces the necessity for each buyer to have substantial business access to do their own due diligence work. Instead, they can rely on our work that allows the seller to remain in control of the transaction for the longest possible period.
Operational Due Diligence
Improving operational performance and managing operational risk are significant sources of both value creation and value protection in a transaction. FTI Consulting experts from our Operational Transformation team advise private equity firms, corporates and lenders regarding the robustness of operational business plans, quantification of operational upside potential and operational risks and the design of 100-day plans in due diligence engagements.
Pre-deal operational diligence focuses on the critical assessment of business plans and the identification of upsides. Our focus is on identifying operational efficiencies, cost reduction opportunities and synergies, either as sources of value creation for parties acquiring businesses or when selling businesses, and the communication of these opportunities on behalf of vendors to maximise deal value.
Also, we are skilled in reviewing the operational aspects of business plans on behalf of lenders who require insight and comfort on the operating performance and cash flow of a particular business.
Our operational diligence services include:
- Assessment of the operational capability of a target business
- Evaluation of forecast cost reduction and restructuring plans
- Synergy and upside identification
- Assessment of operational risks
- Development of 100-day plans
Members of our team have all held senior positions in industry and the consulting profession and are able to provide a robust challenge and assessment of the operational aspects of business plans based on real world experience. We provide operational due diligence either as a stand alone deliverable or as partners with our financial due diligence team to provide complete operational and financial diligence to support a transaction.
Following a transaction we provide post-merger integration, operations improvement and carve-out services to private equity firms and corporates in order to deliver and track benefits arising from a transaction as well as mitigate identified risk issues.