A merger or acquisition can offer your firm unparalleled growth and profits. But managing the process is challenging and can be a strain on your internal resources. Companies that don’t have a dedicated acquisition or corporate development department may lack the resources, industry contacts, negotiating skills and financial expertise to successfully manage an acquisition. Regardless of whether a firm is buying or selling a company, firms strive for the best possible financial outcome. Enlisting the help of a business partner, who has managed the process many times, alleviates the strain of on-site resources and dramatically improves chances for a successful transaction.

Freed Maxick professionals can help with every step of the M&A transaction cycle, including:

• Create a strategy to grow your business
• Identifying, approaching, evaluating and valuing acquisition targets
• Assist in the due diligence process
• Tax planning, tax structuring and transaction planning
• Assist in negotiations, structuring and closing the transaction
• Provide financing assistance, including debt placement and equity markets
• Implement post-transaction integration plans
• Valuation services
• Value creation consulting and advisory services

Depending on your needs and acquisition experience, we provide complete solutions ranging from strategic planning to due diligence and post-sale integration to assistance with specific M&A issues. This means we tailor a solution that meets your specific needs.

Financial Due Diligence

Through rigorous due diligence, we address financial, tax and post-transaction integration issues to help you complete transactions efficiently and effectively while protecting your interests. We can:

• Assess the quality of earnings and cash flow
• Analyze the quality of assets and liabilities
• Identify internal control weaknesses related to systems and personnel
• Produce a detailed issues report
• Provide working capital adjustments and analysis for closing

Post-transaction

Post-transaction, we help with purchase accounting and opening balance sheet issues and also assist investors in divesting portfolio companies to realize maximum investment returns. We identify transitional issues and assist with integration. Using our internal audit and tax expertise, we proactively counsel newly acquired portfolio companies on day-to-day operations.

Sell-side due diligence

When the time is right, we also perform sell-side due diligence to help you prepare for a sale. Our process prevents unanticipated surprises during buyer due diligence and includes:

• EBITDA adjustment identification and support
• Carve-outs
• Divestitures
• Internal resource support and augmentation
• Data room preparation

Tax Due Diligence & Structuring

Every major business transaction involves tax implications that can have huge financial impacts. Freed Maxick’s in-depth knowledge of complex tax issues and mergers and acquisitions (M&A) provides innovative solutions that overcome even the most difficult challenges. Freed Maxick’s M&A tax professionals can help develop tax strategies that support the deal and your organization as a whole. We assist companies through transactions by helping to:

Complete transaction successfully

• Examination of federal, state, local and international tax implications
• Determination of the ideal structure for a transaction

Generate savings

• Analysis of M&A costs to maximize tax deductions
• Evaluation of options for asset step-up induced depreciation and amortization tax shields
• Maximum benefit from use of net operating losses, in accordance with Internal Revenue Code (IRC) section 382

Implement post-transaction analysis strategies

• Reduce liabilities
• Buy-side and sell-side tax due diligence to uncover potential tax liabilities and opportunities
• Effective structures for rollover of continuing target owners
• Assessment of opportunities to alleviate double taxation

Business and Information Technology Process Operations Assessments

Many times during a business acquisition the acquiring entity is interested in understanding the core operating functions and technologies that enable the target to carry out their day-to-day activities. Our assessment services help identify and analyze these critical areas, including the people, processes and technologies to understand critical factors such as specialized skills required for providing services, the utilization of Enterprise Resource Planning systems, Customer Relationship Management applications, and other technologies in delivering these services, how integral these systems are within operations, how they are managed and what risks might impede the ability to stay competitive going forward under existing operations.

Our business process assessments can include areas such as:

• Order to cash
• Purchasing
• Payroll
• Human resources
• Accounting and finance
• Inventory management and distribution
• Manufacturing or service providing functions.

Our evaluation of information technology focuses on exploring aspects such as:

• Core and secondary systems
• Licensing and software costs
• Personnel skills and abilities
• Third-parties utilized and associated risk
• Information security
• Computer operations
• Change management and development

Having a strong understanding of the people, processes and technologies will help provide the acquiring entity with insight into the complexities of the target, what types of changes they might be able to implement based on other experience or by leveraging other assets, get a sense of potential unforeseen risks, and what appears to be operating both effectively less effectively today.

Cybersecurity Maturity Assessment

Cybersecurity is a key consideration for all companies, whether large or small, and having insight into the maturity of a target entity’s cybersecurity readiness is critical for understanding these risks and whether they are being managed at an effective level.  Our cybersecurity assessment services focus on understanding the business and its use of technology, the types of data it maintains or utilizes, and other driving risk factors that impact the planning that an organization should have undergone to appropriately plan and potentially respond to a breach.  Once these risk factors are known and understood, our maturity assessment looks at the following and how the target entity has adopted each within their cybersecurity framework:

The cybersecurity maturity assessment results will help the acquirer understand how significantly the target has considered cybersecurity risks within its operations, and more importantly be able to use this information to consider what improvements might be necessary should the transaction close.