Mergers & acquisitions transaction services: engineering design and assembly business

Challenge:

Client with limited resources needed to conduct financial analysis and reporting process to determine closing price of acquisitions.

Existing challenges included:

• Unsophisticated Target with poor quality financial data which inhibited client’s ability to assess performance and ultimately valuation.
• Lack of financial and human resources at Target to address financial reporting and record keeping deficiencies.
• Time sensitive process upon which to provide client with a report and recommendations on the transaction.

How Mazars helped:

We assembled a team of skilled M&A professionals who were experienced in financial planning and process.

Solution:

• Perform a targeted analysis into core accounting processes of the business, primary being percentage of completion accounting, to address inaccuracies distorting results.
• Analyze balance sheet for possible working capital considerations that would affect closing purchase price.
• Provide suggestions to correct and strengthen the quality of financial reporting.

Results:

• Provided client with accurate view of the financial results of the business, and recommendations for go-forward financial reporting improvements to implement.
• Informed client of various accruals and deposits that should be included in the debt of the Target, as opposed to net working capital, resulting in a decrease in purchase price of the transaction.
• With accurate financial information and clear visibility into accounts, client was able to close on the transaction. 

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The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.