Valuation Considerations: What Should You Be Thinking About Before Year-End?
There has been considerable consolidation in the marketplace over the last 18 months. Covid has created challenges causing owners to consider earlier exits than planned, PPP and other government subsidies have infused some firms with excess cash and Private Equity firms are buying smaller professional services firms and rolling them into a larger platform. If your company has a potential deal or if you have closed a deal, what should you be thinking about from a valuation perspective before year end?
From diligence to performing your own quality of earnings analysis on your financial statements so there are no surprises throughout a transaction, to understanding the tax implications for the buyer and seller, the structure for what’s being acquired, and how that’s going to impact the accounting and potentially any existing or future bank covenants, we cover the questions you should be asking before year end. If you have acquired another firm and the dust has now settled there are a number of things that have to happen in a relatively short period of time, including potentially a whole new set of reporting requirements, covenant considerations, opening balance sheet preparation, purchase price allocation values, earnout calculations and rollover equity considerations.
Listen to Scott Duda, Leader of Cherry Bekaert’s Professional Services Industry practice and Anna Townsend, a partner in the Firm’s Valuation Services group, as they discuss what you need to think about as you go down the diligence and deal path.