We conduct rigorous and effective due diligence for our clients considering a merger or acquisition. Effective pre-acquisition due diligence is important to fully understand the business and operational risks, better analyses financial and operational health, set negotiation parameters, challenge valuation assumptions, uncover potential liabilities exposure and understand the integration risk.

Understanding our clients’ goals

At Ecovis, our first priority is to focus on the problems, goals, and issues important to our clients. Our concentrated client-focused approach ensures that we are delivering exactly what our clients need.

Our approach

In general, our approach includes but not limited to the following:

• Financial reviews
• Accounting reviews
• Business reviews

1. Financial reviews
When we represent buyers, we typically:

• Validate Pro-forma EBITDA
• Justify “add-backs” and/or non-recurring expenses
• Assess the appropriate amount of “normal” working capital
• Comments on value drivers and operating cash flows
• Comments on net debt position/working capital
• Challenging the reasonableness of forecasts and projections
• Challenging the assumptions underlying the valuation of the business
• Related party transactions/stand-alone costs

When we represent sellers, we typically:

• Organize, maintain and provide due diligence materials to the buyer
• Help negotiate business aspects of the definitive agreement
• Provide an independent review of the overall value established for the business

2. Accounting reviews
We inspect the target company’s historical financial statements and accounting policies and procedures. These reviews usually cover:

• Accounting systems and records
• Internal accounting procedures
• Audited financial statements including cash, trade receivables and payables, property, plant and equipment, contingent liabilities, impairment of financial assets and non-financial assets, revenue and expense recognition.
• Review of the auditors’ work papers
• Tax liabilities and obligations

3. Business reviews
We can investigate specific areas of concern about the target company’s industry and operations. These reviews provide an in-depth analysis of the target company’s:

• Industry
• Competitive environment
• Products and services
• Customers
• Key suppliers
• Sales and marketing
• Information technology systems
• Human resources issues

Our due diligence investigations often provide negotiating leverage to our clients, resulting in better pricing and/or terms and a better awareness of the challenges and issues, facing the organization.

Going Public through an Initial Public Offering (IPO) is a natural progression for most successful private enterprises, as the benefits can be considerable. However, the process of completing an IPO is a tedious and daunting task for most enterprises.
We approach IPO as follows:

Phase 1 – Pre-IPO discussion

• Discuss with management their objective of IPO and advise them the various options open to them;
• Assess the group’s feasibility for listing and the choice of various markets
• Advise on pro and con of going public
• Advise the listing process, regulations and requirements
• Provide an indicative valuation based on the prevailing market condition

Phase 2 – Pre-IPO review

• Conduct due diligence on the businesses in the group
• Identify major issues which are possible hurdle to the listing
• Review the group’s past financial performance and with the auditors/reporting accountants
• Review the existing group’s structure and advise on an effective structure for listing purpose
• Assist in restructuring for potential debt and/or equity fund raising opportunity
• Assist in developing IPO’s strategy and planning

Phase 3 – IPO preparation

• Assist in introducing the professional parties including the issue managers, lawyers etc
• Assist in compilation of information to be included in the prospectus
• Assist in preparing financial projections and drafting of Board Memorandum
• Managing and monitoring the progress to ensure timeliness of reporting

Creating value via corporate restructuring is necessary as a result of economic uncertainty, changes in business practice efficiency and performance, and heightened marketplace competition. We work hand-in-hand with management to identify the causes of the difficulties and the best strategy for the business recovery and then develop a solution which we will support the implementation. This process helps clients improve operating performance, restore and enhance profitability.

Our approach including the following:

• Strategic alternative assessment – Business viability review
• Valuation and Liquidity analysis
• Optimal capital structuring
• Advice on the sale of an entire company, a division, a subsidiary or a specific asset
• Debt restructuring strategies
• Exit financing assistance
• Negotiations regarding financings and M&A transactions
• Communications with key stakeholders and debt negotiations/refinancing

We are proactive in management of relationship with key funding providers in order to optimise information flow and agree on a mutually benefit plan for the business.