Transactional Support & Due Diligence
Whether a technology company is participating in an equity raise, debt financing, acquisition, or sale, there will be a requirement to perform, or be the subject of, due diligence.
Buy-Side Due Diligence
Due diligence plays an essential role in the decision-making process when considering to buy or invest in a technology company. Due diligence is vital to identifying business risks, confirming valuation, and quantifying synergies. KROST’s team of experts will help:
- Assess the target's quality of revenue, profits, and cash-flow
- Analyze the target’s quality of assets and liabilities being acquired or assumed
- Evaluate the historical use and future needs of working capital
- Identify internal operational weaknesses of financial systems and personnel
- Analyze and test the target's financial projections
- Create a pro-forma projection of the combined companies
- Highlight potential deal-breakers
- Personnel - assessing the experience and skill set of managers and senior business leaders
- IT infrastructure and cyber security implementation
(1), (2), and (3) are normally delivered through a Quality of Earnings Report.
In addition, we can:
For non-financial due diligence, the KROST team can provide due diligence on:
Sell-Side Due Diligence
For companies who are contemplating the sale of a Company ; or re-capitalization - selling a portion of the business, but still retaining some equity; or an equity raise – getting a capital investment through the sale of new shares; and/or debt financing - getting capital through a loan, should consider sell-side due diligence.
Sell-side due diligence prepares the Company for the type of investigation that a buyer/investor will perform as part of their due diligence. By identifying potential issues ahead of the final stages of a transaction, there is more time to make adjustments and corrections.
Sell-side due diligence can vary in scope and depth of review – the key is to focus on potential issues that may be seen, by the buyer/investor, to increase the risk of the acquisition/investment or to reduce the perceived value of the business.