The customer asked: "Can Elliott Davis assist in the financial due diligence of a target to confirm forecast future, value for sale price and identify unrecorded liabilities?”
Context
- A national group of best-in-class veterinary service providers
- Offers full-service care to improve outcomes for pet families and providers
- Client sought help in a potential transaction of 10 veterinary practices
Our Approach
- Completed financial diligence with an Excel based workbook
- Prepared quality of earnings analysis by location/clinic and analyzed and commented on historical periods
- Assessed target’s revenue recognition policies, gross margins by location and methods to recognize costs of sales
- Prepared proof of revenue and labor with reconciliation against bank and salary and wage expenses
- Analyzed accounts receivable and payable and property and equipment, along with analysis of debt
- Evaluated proposed transaction tax structure and implications on buyer/ customer
- Analyzed nexus footprint and estimated potential tax exposure or tax liabilities
- Inquired as to target tax reporting practices and procedures, use tax payments, sales tax examinations
- Performed IT diligence including an assessment of infrastructures, cybersecurity, policies and procedures, regulatory, and overall technology health and maturity for target locations
Customer Impact
- Received rigorous analysis of financial, operational and tax statements to enable actionable decision making
- Improved ability to negotiate terms
- Uncovered potential risks associated with target
- Obtained an enumerated list of IT risks with proposed and prioritized remediation plans by location
- Defined a baseline technology ecosystem for each additional target
We Can Help
For more information on how Elliott Davis can assist you and your business, contact a member of our team.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.
