Buyers, lenders and sellers involved in mergers or acquisitions and other corporate finance activities must identify the risks and the opportunities associated with the business under consideration. By addressing a range of strategic, financial, and operational issues as part of the due diligence process, Magnus Investment Services provides financial due diligence services to buyers, lenders and sellers in a variety of transactional situations. Thus, we assist strategic and financial buyers focused on historic and projected financial performance by developing a more complete picture of the financial scenarios of a target business through various mechanisms (e.g. reviewing the quality of earnings and cash flow, conducting integration assessments, assessing the purchase price, etc). Furthermore, we identify the risks related to corporate governance, financial reporting and the accounting environment.
Contents of our Due Diligence Report include (but not limited to):
- Key Findings and Executive summary
- History and Business (e.g. company structure, strategy, objectives, markets & competition, contracts, sales, services, purchasing, etc)
- Organizational structure, management, and personnel (E.g. BOD, pensions, labor relations, trade unions, etc)
- Financial control environment (e.g. systems, IT, treasury, budgets, etc)
- Accounting policies
- Financial statements (IS, BS, net assets, CF, taxation, etc)
- Other (e.g. insurances, litigation, contingent liabilities)
Conducting effective financial due diligence can help buyers structure strategic transactions and avoid costly mistakes. In any merger or acquisition, financial due diligence is important not only for negotiation purposes but also to identify future growth opportunities and post-acquisition strategies. Using a unique blend of quantitative, qualitative, analytic and financial skills by emphasizing on the strategic post-value of the target business that is the subject of the transaction, we focus on facts, trends and behaviors that are critical to the success of a deal and the synergies created. We see the transaction through to structuring, negotiations and closing.
Sample Buy-Side services include:
- Financial position analysis
- Accounting issues and Financial abnormalities affecting current and future earnings (“quality of earnings”) and cash flow evaluation
- Working Capital analysis
- Contingent liabilities review
- Normalized & Pro forma EBITDA adjustments and analysis
- Operational metrics and key business drivers analysis
- target’s management team capabilities.
- identifying internal control weaknesses-key stakeholders’ relationship,performance improvement systems and opportunities for cost savings.
- Business integration challenges
- Corporate governance, financial reporting, fairness opinions, and regulatory environment.assessments.
- Purchase price adjustments review
Sell-side due diligence help seller’s better understand the strengths and weaknesses of their position pursuant to a deal. Magnus Investment Services works with its sell-side clients to bring maturity and transparency to back-office processes and documentation in advance of courting a deal. By planning ahead and engaging our team, our clients have the opportunity to maximize the ultimate selling price of their investment asset and minimize the negative impact of unforeseen purchase price adjustments.
Sample sell-side services include the following:
- Carve out; divestiture; and spin-off assistance
- Data room strategy and organization
- Purchase price adjustment review
- Working capital analysis
- Financial reporting and regulatory process improvement
- Intrinsic Valuation.
- Development of buyer list.
- Process orchestration and negotiations with buyer
In addition to traditional commercial and asset-based loans, lenders are often active participants in any merger or acquisition. Concerned primarily with the target business’s quality of collateral, our financial due diligence services can help lenders assess the collateral supporting a loan as well as the reporting systems that produce the information. We identify and analyze
- Borrowing base certificates
- Dilution and other collection problems
- Inventory aging and obsolescence
Magnus Investment Services works non-exclusively and on a non-discretionary basis as stated in its Indemnity agreement and, hence, does not take an upfront fee or charge a percentage fee. Instead, we work on an hourly fee basis, and the client may end the engagement at any time. Further, Magnus Investment Services do not take an equity interest in the client’s business and therefore avoids future conflicts of interest. As independent and objective consultants, we provide impartial advice to investors and lenders with a clear focus of enhancing deal decision making, driving profit growth and business sustainability. Too often, poor judgment and miscalculations derail otherwise promising transactions. Our straight-forward approach allows us to build a long-term relationship with management and position the business for eventual sale.
Merger & Acquisition Support Services include:
- Business Plan validation
- Analysis of all top-line assumptions
- Proprietary investment ideas
- Specific company identification
- Due diligence support
- Valuation and historical transaction analysis
- Shareholders’ value creation
- Post-merger performance metrics
Transaction Support Services
Since transactions can be complex and risky endeavors which businesses undertake, buyers want to be sure they’re making the correct acquisition by appropriately anticipating the risks and issues that may arise. Hence, it is important to evaluate and validate the financial, operational and strategic assumptions about the transaction through an objective due diligence process.
Our Transaction Support services include:
- Deal structure, negotiation and implementation
- Financial analysis and presentation
- Integration planning and execution
- Strategy development
Working with our transaction support team you can anticipate:
- an integrated service offering which can assist every phase of the transaction process
- professionals with valuable transaction experience
- standardized methodology with a customized approach relative to each specific situation
- strong expertise with both financial and strategic buyers
- easy access to resources and to industry and subject matter professionals