In the world of Transaction Advisory Services (TAS), if you are a company, a senior or mezzanine lender or a Private Equity Group
(PEG) that is ready to acquire, invest or make a loan to a business, the scouting report you need takes the form of due diligence. Withum has a sophisticated team of qualified due diligence personnel who understand transactions, can refine the nature of the information they need, effectively and efficiently obtain this information, review it and prepare the type of analytical report you will need before you complete your transaction.
The Overall Transaction Advisory Plan
Developing the overall game plan for your cash flow loan or acquisition, understanding the business and risk issues, being able to diagnose tax issues which may arise and coming up with the structure which is most tax-efficient while at the same time helping advise the process is all part of what our TAS professionals do. They know that making the right moves before the deal is done is half the battle. With significant transaction experience, our specialists can quickly become a valued member of your team by either providing quality advice on business issues, accounting and tax structure or performing the required on-site diligence procedures. They work alongside investment bankers, attorneys, company personnel and other professional advisors to ensure the appropriate effort is spent to understand issues and risks and to suggest methods for mitigating any concerns.
While there are a number of situations where our TAS group has been successful, there are three where we are particularly effective:
- If you are a PEG with less than $1 billion in assets, the type of transaction you undertake along with the typical target you have fits extremely well with the type of companies that we serve. We can be quality but a cost-efficient player on your team.
- As a cash flow mezzanine lender, while in many cases you may be utilizing the diligence of the private equity group/sponsor, we are finding more situations where you are doing standalone or “fundless sponsor” transactions. Our TAS professionals are experienced players in this market and can be a true value add particularly in providing information like Quality of Earnings analysis.
- As a midmarket company, you know the recent economic activity has been a challenge but it has also created opportunities for you to make the appropriate strategic acquisitions. Your typical target is the type of business that we have served for over 40 years, and we find that we can fit right into your acquisition team. We also find that our resources in accounting and tax structuring are particularly helpful as in certain cases – you may not have the transaction experience that PEGs and cash flow lenders do.
Senior, Mezzanine or Cash Flow Lenders
Management teams need resources to grow and to take their game to the next level. When there is a significant transaction such as a buyout, a leveraged recapitalization or a significant acquisition, senior, mezzanine and other cash flow lenders provide the resources that help fuel that growth.
Once a senior, mezzanine or cash flow lender comes onto the scene, they are often dealing with a growing company that faces a more complex structure. The projected cash flows and Quality of Earnings are critical elements in determining the level of resources to provide. If your transaction involves a Private Equity Group, there is a good chance that you can rely on their due diligence procedures. However, in more and more cases, you may be involved with a “fundless” deal and you may need some help in determining whether your next “big thing” is prepared for the future.
- Tax Due Diligence
- Federal, state and international
- Income, franchise, sales and use, excise, payroll, bulk sale
- Deal Structure Optimization
- Purchase Price Allocation
- Transfer Pricing Studies
- Cost Segregation Studies
Other Accounting and Advisory Services
- Sale Readiness and Value Growth
- Acquisition Accounting Support
- Finance and Accounting Outsourcing
- Portfolio Company Audits
James F. Weeks
CPA, Market Leader, Transaction Advisory Services,