Transaction Forensics

The Transaction Forensics team assists organizations and legal counsel in identifying and mitigating financial, operational and reputational risks inherent to mergers and acquisition transactions. 

Related topics Forensics Risk Cybersecurity

What EY can do for you

Throughout the M&A lifecycle, EY teams help organizations and their advisers navigate the risk and opportunities inherent to M&A transactions. Pre-transaction, EY teams deliver value by analyzing key financial transaction drivers in sales and purchase agreement (SPA), in the meantime mitigating potential reputation and regulatory challenges from prior business conduct. Post-transaction, EY teams help companies with identifying, mitigating and resolving disputed financial items, and with ensuring a stable ongoing compliance environment.

Pre-transaction services

Successful transactions rely on well-prepared sellers and diligent buyers. Before closing any deal, both parties need to analyze a range of risks to reduce potential loss of deal value. These risks may include fraud, bribery, corruption, restrictions on trade and export, other conflicts of interest, third-party integrity, reputation, and regulatory investigations. Whichever side of a transaction we support you on, EY professionals help you mitigate these risks during the drafting and before signing to help protect and provide transaction value.

  • Forensic due diligence

    • Conduct integrity diligence, including background analysis on key executives and counterparties
    • Assess the risks that may cause significant reputational or financial damage (fraud, bribery and corruption, money laundering, economic sanctions, and conflict of interest)
    • Strategize recurring vs. nonrecurring risk reduction, including existing compliance program assessment and integration
    • Government contract due diligence (e.g., exposure to risks of  bribery in contracting)
    • Perform fact-finding and transaction testing
  • Pre-signing SPA advice

    • Focus the outcome of commercial negotiations by working with you and your advisors to incorporate specific provisions within the SPA
    • Advise on the merits of different purchase-price mechanisms (e.g., locked box vs. completion accounts)
    • Support pre-signing negotiations (e.g., treatment of debt, cash and working capital, appropriate earn-out target, permitted leakage)
  • Pre-completion assistance

    • Perform completion account trial runs (e.g., net working capital, earn-out)
    • Assist with the estimation process of closing net debt and working capital for determining initial consideration payable at completion
    • Focus the outcome of commercial negotiations by working with you and your advisors to incorporate specific provisions within the sale and purchase agreement
    • Advise on the merits of different purchase-price mechanisms (e.g., Locked Box vs Completion Accounts)
    • Support pre-signing negotiations (e.g. treatment of debt, cash and working capital; appropriate earn-out targets; permitted leakage)

Post-transaction services

Experienced market participants know that having completed the deal is less than half the challenge. Uncertainties related to valuations, working capital adjustments and earn-outs, along with increased investments in emerging markets, expose transacting parties to significant risks even after the deal is completed. Successful closing, navigating financial and operational integration and driving expected synergies all provide opportunities and risks. EY teams help you identify, respond to, and mitigate post-deal financial and compliance challenges in order to bring successful deals to fruition.

  • Investigation and compliance services

    • Assist with the development of anti-fraud, anti-bribery and anti-corruption compliance programs
    • Conduct post-closing risk assessments; advise on compliance risk programs and perform compliance monitoring
    • Leverage data analytics to perform enhanced due diligence with additional data from the acquired business, post-closing
    • Conduct fraud investigations
  • Completion accounts preparation and review

    • Advise and assist with the preparation or review of completion accounts
    • Formulate positions and identify supporting documentation for adjustments
    • Assist management with requests for information to the other party
    • Prepare the objection notice
  • Completion accounts dispute

    • Provide and analyze factual information to inform a realistic settlement position
    • Advise on the pros and cons of settlement vs. a neutral accountant (i.e., expert or arbitrator) determination
    • Support the objection notice’s negotiation of disputed amounts
  • Expert (neutral account) accountant determination

    • Act as an independent neutral accountant in a post-closing dispute and provide an expert (neutral accountant) determination were not appointed as neutral accountant
    • Assist in the preparation of submissions to the neutral accountant
    • Provide advice in the selection of the neutral accountant
    • Assist in the preparation of responses to the neutral accountant’s questions
  • Expert witness services

    • Serve as consulting expert or testifying expert on behalf of seller or buyer
    • Provide independent advice in the expert witness identification process
    • Assist in the preparation of representation and warranties claims

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