Services

Vendor Due Diligence

Vendor due diligence involves a detailed assessment and the preparation of an independent report on a company which is issued to interested parties during the initial sale process.

Vendor due diligence involves a detailed assessment and the preparation of an independent report on a company which is issued to interested parties during the initial sales process and can be legally relied upon by the ultimate purchaser.

For vendors, we provide:

• Early identification and detailed analysis of key risks and issues for potential purchasers. This gives the vendor the opportunity to ensure they can be mitigated or placed in the appropriate context prior to commencement of the acquisition due diligence process by potential purchasers
• Increased confidence for potential buyers through the presentation of a detailed financial due diligence report that reduces the cost and time associated for potential purchasers to due diligence.

Vendor due diligence can help to:

• Increase the number of parties that review the acquisition opportunity in detail
• Reduce transaction costs and streamlining the acquisition due diligence process for all bidders; and
• Potentially increased sale proceeds due to resolution/mitigation of key risk and valuation issues prior to the sale process commencing and the likelihood of more bidders in the sale process.

The PKF Corporate Finance approach to the Vendor Due Diligence process includes:

• Independent and detailed financial due diligence of your business
• Commercially focused advice
• Immediate feedback regarding issues as they arise
• Progress reports detailing key risks and issues
• Identification of the key drivers of the business
• Identification of key people and contractual issues
• Report on the significant risks (which may be able to be addressed prior to sale)
• Assistance through buy-side due diligence process
• Constant communication of findings throughout the process; and
• A complete independent report issued to interested parties.

Acquisition Due Diligence

Whether you are purchasing your first business or contemplating a strategic addition to an existing business, the importance of undertaking a robust due diligence process cannot be ignored.

Due diligence is an essential part of any business acquisition and PKF Corporate

Finance is ideally suited to provide a clear and authoritative review. For buyers, our team can conduct the comprehensive review you need to make a  well-informed decision about the viability of a proposed sale or purchase. Our independence, experience, commercial approach, attention to detail and objectivity provides increased confidence and supports clear decision making.

Our Approach

We can help you make a well-informed decision about the proposed acquisition through careful analysis of:

• Forecast earnings and cash flows
• Historical earnings and cash flows
• Working capital requirements
• Key business drivers
• Financial position
• Accounting policies
• Financial reporting systems and processes; and
• Tax compliance

We can also advise you on specific aspects of the sale agreement such as purchase price adjustment for working capital and net debt as well as the broader financial aspects of the agreement such as completion accounts or locked box mechanism. We will tailor our reporting to meet your requirements. This may be in the form of a short form report focused on the key issues and risk, a detailed long form report and/or an excel based data book.

Equity Capital Raising

Businesses can require additional capital for a range of reasons, including funding new businesses or growing an existing one. We work with businesses to secure capital through arrangements that are strategically aligned with the goals of our clients.

PKF Corporate Finance can assist you to source the right capital at the right price – whether it’s for a new business or to grow an existing one, or to finance the commercialisation of technology or property developments.

We undertake regular discussions with a large number of investors including private, institutional and global organizations as well as private equity firms. These discussions give us excellent insight with respect to their investment appetites as well as their acquisition and divestment goals.

We have significant experience in advising clients on funding strategies at various stages of the business lifecycle including accessing capital from venture capital; private equity; family office and high net worth individuals plus many other sources.

We have excellent working relationships with a wide range of investors and financiers.

Our Services

We can assist in many areas of the capital raising process to improve your chances of a successful capital raising while also relieving your firm of the administrative burden of the process including:

• Valuation analysis and reports
• Assistance with preparation or refinement of business plans
• Preparation of financial models
• Assistance with preparation or refinement of financial forecasts and projections
• Advice on alternative funding structures
• Identify most suitable capital providers
• Appointment and management of other advisors
• Preparation of investment teasers
• Preparation of offer documents – Information Memorandum, Prospectus or Product Disclosure Statement
• Management of the overall investor/financier due diligence process (financial, legal, commercial, regulatory and HR)
• Negotiate with preferred investors/financiers
• Advice on the key terms of the funding agreement
• Management of the completion process

PKF Corporate Finance has a team of corporate finance professionals in key markets in Asia, UK & Europe, North America and South America. We work closely with these teams to access capital from offshore markets where appropriate.

Private Equity

Private equity funding is a common source of funding to enable you to accelerate the growth of your business, be it via organic expansion, acquisition, or industry consolidation.

Private equity funding is often overlooked as a potential source of funding to support business growth, but with the right support it can be a realistic option. Raising capital from private equity funds requires an advisor experienced in working with private equity funds. PKF Corporate Finance is experienced at assisting our clients to access private equity for organic expansion, acquisition of another business, industry consolidation or management buyouts. We have established relationships with a number of private equity funds, and we can facilitate introductions to these funds to smooth the process of negotiating and finalising funding arrangements.

Our Services

• Making the initial approach to private equity funds on your behalf
• Negotiating with banks and private equity funds with respect to debt and equity funding of transactions
• Assistance with debt and equity structures
• Assistance with the preparation of funding agreements
• Assistance in the preparation of shareholder agreements.

Successful private equity funding requires trust and transparency on all sides. PKF advisers have the experience and industry knowledge you need to support your search for funding and the finalisation of a robust agreement.

Valuation

Valuations provide an important insight for companies at critical points in their life cycle – from financial reporting to introducing employee incentives, from securing additional funding to planning an acquisition or a sale, and from forming a new joint venture to the exit of a major shareholder, either amicably or in dispute. Our specialists provide trusted, independent valuations in all these situations. 

We are known for helping businesses identify and value intangible assets. We work closely with venture capital, private equity and family offices during their evaluation of investments. Additionally we provide entrepreneurs with valuations for transactions that may have tax consequences, such as share buy backs, tax advantaged share arrangements (CSOP & EMI), intellectual property transfers and restructuring transactions.

This is how we assist our clients:

Commercial valuations

We undertake valuations for exiting shareholders of a business – amicably or in dispute i.e. divorce, transaction pricing for either a sale or acquisition, articles valuations, Section 593 reports and fairness opinions.

We will work closely with you to ensure we gain a full understanding of the key drivers of the business, the associated risks, both internally and externally, and the opportunities available. This will allow us to build the valuation by linking to the most relevant market data available.

We use widely recognised valuation methods such as DCF and market multiples. Our rigorous approach means that we always seek to use a number of valuation techniques to act as a check against the primary method selected for the business type and ensure the outcomes are fully supportable.

We work closely with our Capital Markets and Transaction advisory specialists when required to allow full value insight into any transaction that our clients are negotiating or executing.

Tax valuations

We provide valuations for employee incentive share schemes including EMI, CSOP, growth shares, market value of assets for CGT or IHT purposes, share gifts, transfer pricing, transfer of intellectual property and restructuring. The involvement of our tax specialists ensures that you understand any tax consequences early on.

Our valuations are prepared for both HMRC and tax authorities in jurisdictions outside the UK where we work closely with our international network to give full insight into these jurisdictions. We have experience in successfully negotiating with the tax authorities on more complex matters.

Where valuations are not required to be submitted to HMRC for approval, we ensure you have a fully supportable valuation in case of a future HMRC enquiry.

Financial reporting valuations

We provide timely valuations of intangible assets, purchase price allocation, impairment reviews and net asset value (NAV) to meet your reporting needs.

We can work with you to prepare independent valuations for reporting purposes under both IFRS and FRS102. This can include the fair valuing of individual assets and employee share options to providing support for impairment reviews and calculations of suitable discount rates.

We also work with private equity and venture capital to assist with valuing unquoted investments. These can be challenging but we have the experience to ensure a supportable opinion is provided on the value.

Independent Expert Reports

Our team has extensive experience in providing independent expert reports for companies in a wide range of sectors.

PKF Corporate Finance assists with the preparation of independent expert reports (IERs) to ensure that a transaction is fair and reasonable with respect to the shareholders that are not associated with the transactions.

Our Services

Our team members have extensive experience in providing Independent Expert Reports for a wide range of transactions across many industries.

We have prepared reports with respect to:

• Takeover offers
• Merger transactions
• Related party transactions
• Share-based transactions in the public arena
• Share issues
• Share buybacks
• Compulsory acquisitions

Our Approach

Our IERs provide impartial and credible advice to shareholders. Reports are presented clearly and concisely, containing:

• A summary of the proposed transaction
• A statement of the purpose and objectives of the report, including a discussion on the presented opinion
• Analysis of the businesses involved
• A description of the relevant industries
• Detailed analysis of the proposed transaction, usually including a valuation of one or more entities

• An opinion on whether a transaction is fair and reasonable and in the best interests of shareholders.

Our experienced team prepares high quality, timely reports. We take our independence seriously and make sure we comply with all regulatory requirements.

Working together, we can investigate, design and build a robust financial model for your business.

Challenges

Important business decisions are usually based on financial models with forecasts.  Approximately 90% of financial models contain errors and may exclude key value drivers, which can result in misleading results. Over time most financial models evolve without well-structured design or integrity checks and often without documentation. Making minor changes can often take a long time and have unexpected consequences.

Our Solution

Working together, we can investigate the uncertainties of key business and market drivers, and underlying assumptions. We undertake proper planning in the design and build of the model for longevity, consistency, and practicality, and with a focus on the required outputs. We incorporate version controls and backups, rigorously test the model, build in checks, and protect parts of the model from users making unauthorised changes.

PKF financial modelling and decision support services help organisations reach their decisions regarding strategy, restructuring, financing (debt and equity), grant applications, capital expenditure, mergers and acquisitions.

We have experience in building a wide range of financial models from simple forecast models for smaller businesses to complex long term forecast models incorporating a wide range of inputs and assumptions for multiple businesses and markets.

Benefits

• Simpler analysis of complex issues
• De-risk decision making by identifying key drivers and their financial implications
• Facilitate sensitivity analysis of any input or variable
• Ongoing use of robust tailor-made financial models that can adapt as the business and/or markets change
• Improved visibility of potential future outcomes with our research and forecasting tools