Performing Due Diligence for Mergers and Acquisitions: Assessing Risks and Earnings, Identifying Deal Breakers

Recording of a 110-minute CPE video webinar with Q&A

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Conducted on Tuesday, November 29, 2022

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Course Materials

This webinar will emphasize the importance of a well-planned and disciplined due diligence review. Our panel of acquisition experts will outline the various elements of the due diligence process, identify common pitfalls in analyzing target investments, and explain the necessity of reverse due diligence review.

Description

Due diligence is the comprehensive review of a target company's financial, operational, customers and markets, legal, tax, HR, and IT functions before the completion of a transaction. CPAs and financial professionals are integral to the due diligence process. Due diligence is inherently different than an audit of financial statements. The latter is not concerned with future profitability levels or normalization of historical earnings.

Appropriately performed, a due diligence review will provide information to assess risks, help the purchaser understand the target business entirely, and, perhaps most importantly, help avoid surprises. Reviewers can employ specific techniques to unearth pertinent matters.

These include understanding drivers like quality of earnings a/k/a historical EBITDA and asking revealing questions to management and employees. One of the most common pitfalls of the process is allocating too little time to tax and financial matters. CPAs working with businesses and their owners must be prepared for potential mergers, acquisitions, and reviews.

Listen as our panel of transaction advisers explains the process of investigating companies, including techniques that can substantially improve due diligence reviews.

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Outline

  1. What is due diligence?
  2. Key objectives of the due diligence process
  3. Common due diligence pitfalls
  4. Key areas of focus during due diligence
  5. Quality of earnings insights
  6. Working capital
  7. Questions for management and employees
  8. Reverse due diligence

Benefits

The panel will cover these and other critical issues:

  • Techniques that can be applied to enhance due diligence reviews substantially
  • Revealing questions to ask management and employees
  • Determining a target's stand-alone value
  • Identifying dealbreakers early on
  • Assessing risks and transactions requirements

Faculty

Moore, Jonathan
Jonathan Moore, CPA
Partner-in-Charge of Advisory Services
PKF O'Connor Davies

Mr. Moore provides accounting due diligence services in connection with mergers and acquisitions, divestitures, and...  |  Read More

Peña, Victor
Victor M. Peña, CPA
Partner
PKF O'Connor Davies

Mr. Peña is currently a Partner at PKF O’Connor Davies’ Financial Services Group, (the...  |  Read More

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