Why Consider Sell-Side Financial Due Diligence?

Selling a company requires careful consideration and due diligence to ensure the transaction is aligned with your business goals. There are many advantages to performing sell-side financial due diligence, including reducing risk, accelerating the transaction, and maximizing the enterprise value.

The value of sell-side financial due diligence:

  • Provides transparency and credibility to the financial information shared with buyers.
  • Reduces risk of surprises surfacing during buyer diligence
  • Experienced diligence professionals support the management team and protect seller interests when handling buyer requests
  • Allows management to focus on running the business during the buyer diligence process to ensure value retention and negotiating leverage
  • Shortens the time needed between execution of the letter of intent and the closing date

The risk of not performing sell-side financial due diligence:

  • Undervaluation
  • Failure to identify errors in accounting during the historical period, such as:
    • Revenue recognition
    • Expense recognition
    • Excessive use of funds for personal use (typically owner related)
    • Accounting for inventory
    • Cash basis versus accrual accounting
  • Lack of understanding of important significant trends (i.e., revenue trends, expense trends, working capital trends, etc.)
  • Failure to identify significant on and off-balance sheet commitments/unreported liabilities (i.e., debt-like considerations)
  • Loss of leverage in post-LOI negotiations

How Centri Can Help

Centri’s integrated approach addresses your needs across the sale process, working with your attorneys, investment bankers and other advisors to identify and mitigate risks. Our process is designed to identify issues, set the narrative, and expand value, all before presenting your business to a potential buyer. Contact us to learn more.

Maxwell B. Heller

Managing Director | M&A Advisory Practice Leader

Max is a Managing Director and the M&A Advisory Practice Leader at Centri. Bringing more than 18 years of merger and acquisition consulting experience, he provides M&A advisory services to private equity firms, venture capital firms, family offices and strategic/corporate clients. Max specializes in providing merger and acquisition advisory services for both strategic and financial buyers and sellers. Max provides value-add services such as buy-side due diligence, sell-side due diligence, sell-side consulting, sell-side readiness, buyer valuation support and working capital analysis/support.

About Centri Business Consulting, LLC

Centri Business Consulting provides the highest quality advisory consulting services to its clients by being reliable and responsive to their needs. Centri provides companies with the expertise they need to meet their reporting demands. Centri specializes in financial reportinginternal controlstechnical accounting researchvaluationmergers & acquisitions, and CFO and HR advisory services for companies of various sizes and industries. From complex technical accounting transactions to monthly financial reporting, our professionals can offer any organization the specialized expertise and multilayered skillsets to ensure the project is completed timely and accurately.

For more information, please visit www.CentriConsulting.com

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