Client Situation
Buying a home can be one of life’s most stressful purchases. Before committing to an offer, buyers want to know the good, the bad, (and hopefully not the ugly) to ensure they’re getting the best deal available. The same principles apply for our clients when they are interested in acquiring a company and need assistance during the due diligence period. The Proper team can take on the challenge of evaluating the ins and outs of the transaction to make sure it is the right opportunity at the right time.
Opportunities/Actionable Items
Buyers and sellers in the industry can vary, spanning from private equity firms to publicly traded entities. Regardless of size or complexity, gathering and analyzing a company’s data opens the door to reach a bit deeper and see what is all on the table.
The first priority is to validate a company’s financials and balance the proverbial checkbook. In order to see how both the buyer and the seller value a company, a baseline measurement of performance needs to be established. Using a company’s stated P&L reconciled against its data, the Proper team checks all the boxes: verifying revenue and margin are accurate, ensuring accounts payable and receivable are in line, and outlining any outstanding risks within the business. Without awareness of these risks, a buyer can be caught by surprise from unexpected changes like large exposure payouts, industry-wide utilization shifts, or client terminations.
The team will also look for synergies between buyers and sellers to make the most of the resources of both companies to create a new, stronger, and more efficient entity. The new combined organization can gain these benefits through operational cost savings, more influence in the market for improved trade contracts, or enhanced efficiencies and capabilities to better serve its clients.
Proper’s final target is benchmarking a company’s current performance against the competition. Anything is fair game – from comparing contractual terms and conditions to weighing the value of a company’s physical and tech assets. In highlighting areas of opportunity, while noting areas of strength, Proper offers the dual benefit of letting a prospective buyer get a better sense of a company’s health while empowering the company with guidance to improve its bottom line.
By preparing detailed, yet intuitive, reporting for leaders factoring for market conditions, competitive advantages, and current negotiations Proper takes these separate pieces and fits them together to complete a picture that you couldn’t see before.
Results
When clients contact Proper, they typically have a general understanding of a company’s financial well-being and footing with the competition. But by conducting careful audits, performance evaluations, and accurate forecasting, all parties involved are equipped with a holistic snapshot of current and future expectations.
In showing how a company can be worth more than the sum of its parts, the Proper team reveals value by taking advantage of available synergies and providing a pathway to risk remediation, along with details on the level of effort needed to execute those plans. With the dynamics of the purchase clearly outlined, Proper leaves clients feeling comfortable and well-positioned to make a sound decision.