Pre-transaction, the first stage of the private equity transaction life cycle, includes some of the most critical steps in helping to ensure the short-term health and long-term viability of a deal. A quality of earnings (QoE) report, for instance, is a critical component to the financial due diligence process. In many ways, a QoE report sets the tone for the entire transaction, so all involved parties are typically quite invested in the timeliness and accuracy of the QoE report.
That said, preparing a QoE report can be a challenging part of the process, particularly when a company does not have its books and records in order. Inaccurate financial information can cause significant delays in the QoE report and, therefore, the transaction. Additionally, it can result in a lower valuation of the company due to concerns about the overall business due to the lack of clean financial information.
It’s not necessarily a matter of sloppy bookkeeping either. Some companies may not possess the resources to maintain books and records to the extent needed for a major transaction. Also, typically a company’s finance team must devote its day-to-day attention to other vital areas. In either case, Baker Tilly is prepared to assist.
Our CFO advisory services team has assisted many companies with this exact situation. We assess, prepare and organize documents in a way that enables a timely QoE report and, in turn, facilitates progress toward a deal. Additionally, we can assist companies in every point of the data gathering process to allow for a smooth transfer of appropriate and compliant data for every party along the transaction phase.
Whether they are just beginning their M&A journey, are trying to acquire financing, or perhaps are ready to go to market, Baker Tilly helps companies stay on track for a successful transaction. Our firm’s combination of resources, connections and experience allow finance teams to concentrate on their day jobs and focus on running the business. The end result is that it saves companies time, energy and money.