Financial Due Diligence
Smart transactions begin with clear insights.
Whether you’re acquiring a new business or selling an existing one, HORNE Capital gives you confidence that your company or investment target have been vetted thoroughly. Our Financial Due Diligence team works closely with the target’s management group to understand the company’s key business drivers and trends, current market value and future potential.
Buy-Side Due Diligence Services
Earnings and Revenue Assessment
We work with clients to arrive at an accurate assessment of Quality of Earnings by performing an analysis of revenues, gross margins and EBITDA, with respect to customers and products. This includes identifying recurring and non-recurring costs and any one-time costs within the entity’s financials.
Working Capital and Cash Flow Assessment
An accurate reading of the actual cash flow and its sustainability is a key factor in determining whether or not an acquisition moves forward. In addition to providing a thorough cash flow assessment, we work with your team to assess how seasonality and other factors may impact working capital and leverage those insights to create meaningful savings in the transaction.
We work directly with your team to address any key accounting and financial reporting risks that could impact any purchase agreement negotiations. We also provide guidance on financial-related items within the agreement. Our experts can help mitigate risk by identifying hidden costs, commitments and contingencies that may exist, on or off the balance sheet.
“Due diligence is where deals come together or fall apart. Our accounting and Quality of Earnings expertise enable us to provide thorough documentation that provides buyers and sellers the data, reporting and insights they need.”
-Emmett Manning, Transaction and Due Diligence Manager
Sell-Side Due Diligence Services
Sell-side due diligence does more than reveal the financial state of a company or division that is being sold. It also helps you identify questions or issues that may arise during negotiations. We work with you to demonstrate the real and potential value of the segment being sold and enable you to market it more effectively to potential buyers.
Companies with multiple product lines or business units often find that a particular segment isn’t operating to its full potential. Or, they may have business segments that are not aligned with their long-term, strategic vision. In cases like these, we can work with you to conduct a carve-out analysis that provides a detailed overview of the performance of that specific segment so that its current and potential worth can be demonstrated.
Stand-Alone Cost Analysis
Whether your goal is selling a business segment or evaluating each one’s financial performance, a standalone cost analysis can provide an objective view of what it costs to operate any specific segment of your company. The resulting insights can help you structure your organization more efficiently, divest yourself of underperforming assets or gain valuable insights into the performance of a target division or product line.