M&A due diligence
M&A success starts with comprehensive diligence, including financial, tax, commercial, operational, IT and cyber due diligence. We help corporate and private equity clients identify important transaction value drivers, improve deal structures, mitigate risks and challenge assumptions about future performance.
What EY can do for you
We provide you with the comprehensive advice you need to help achieve your objectives:
Financial due diligence
We go beyond the numbers to examine the fundamentals of the potential transaction, test the investment thesis and provide a deep analysis of the crucial areas that will enhance value. Our approach takes market trends and business drivers into consideration, as well as adjustments to earnings, historical performance, benchmarking, forecast assumptions, and the rights and obligations that will be inherited through the balance sheet. We also provide critical input on the deal structure and closing contracts.
Tax due diligence
Our diverse tax due diligence team can help you navigate an ever-changing business environment and make informed decisions that align with your long-term strategy. This includes helping you identify upfront purchase price adjustments, protect against unknown liabilities, implement structures and remediation measures to increase value, and assess tax synergies.
Operational due diligence
To help you generate incremental value post acquisition, our advice is rooted in our deep operational and industry experience to give you a competitive edge in the acquisition process. We help identify value creation opportunities, including identifying and validating synergies as well as uncovering areas of risks and potential transactions issues early.
Commercial due diligence
Using data-driven analysis (including our capabilities in primary and secondary research, and econometric analysis) we are able to support our clients’ diligence process in evaluating the attractiveness of a target’s industry, and assessing its competitive position and opportunities for growth. We help determine the future trends in the addressable market and customer demand, strength of your competitive position, performance improvement areas, potential synergies, and risks.
IT due diligence
IT due diligence is core to a business’s value story. Our advice is focused on identifying how technology impacts affect the value of an asset prior to a deal. We help you focus on the dependency of business plans on technology platforms. This includes understanding the suitability of existing IT capabilities and opportunities to leverage IT to access new markets (e.g., e-commerce, customer relationship management, and social platforms and mobile) as well as operational improvements required to modernized business operations (e.g., internet of things and robotics) and drive efficiency insights (e.g., cloud and analytics).
Cyber due diligence
Our diligence-based cyber approach quickly establishes where urgent remediation action is required to protect or improve earnings before interest, tax, depreciation and amortization (EBITDA). We approach cyber by first understanding the business operating model, then applying our experience, benchmarks and tools to determine where cyber is critical to the brand, operations, assets and applicable regulations. We can help you address cyber threats in target companies early in the transaction life cycle, assessing the value of that risk and translating it into financial terms. Finally, we help with cyber risk mitigation to boards and regulators.
By working with cross-competencies teams, the value of our insights and deal advice is significantly enhanced. Our approach brings:
- Efficiency: through streamlined project management, fewer advisors to help manage and simplified interactions with the target
- Consistency: through a common fact base and financials, sharing of data and findings in real time, and combined sector and competency experience
- Deeper insights: such as a facilitated integration planning ahead of deal signing — generated by synergies across a broader skill set and extensive use of transaction analytics
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