Financial modeling and model review
During M&A and joint venture negotiations, differing views on market demand, competitive dynamics, cost structures and financial trends can create challenges in price negotiations and deal execution. A clear, robust financial model helps identify the key drivers of value, assess the impact of different assumptions on performance and profitability, and bridge gaps between parties to support successful transactions.
PwC combines extensive financial modelling experience with deep valuation, industry, accounting, tax and financing expertise. We help turn transaction data and stakeholder perspectives into practical, fit-for-purpose financial models that support a range of valuation objectives — from substantiating the seller’s position to validating the buyer’s assumptions.
If you are facing any of the following situations:
- Planning to transfer the equity interest of a company or divest certain businesses or assets, which require an understanding of their fair value and development of a clear value proposition;
- Planning to undertake an acquisition, joint venture, or other form of strategic alliance, and need validation of the seller’s financial model and valuation proposition, while developing a model that incorporates synergies and scenario analysis;
- Planning to participate in infrastructure investments or large scale public sector tenders, and requiring the construction or review of complex project finance models to meet the needs of various stakeholders, including sellers, buyers, banks, and insurers.
We can help you with the following services:
- M&A Model Development
- Financing Model Development
- Financial Model and Assumption Review
M&A Model Development
In mergers and acquisitions, joint ventures, or strategic alliance transactions, a financial model that combines analytical rigor with scenario flexibility is a critical tool for informed decision making and effective negotiation. PwC combines commonly adopted valuation methodologies, sector expertise, and local market experience to help you build tailored M&A financial model from the ground up, providing a common platform for valuation, pricing, and negotiation of transaction terms.
- Develop sell-side financial models that effectively support the value proposition and future growth story of the business
- Build acquisition and investment models that incorporate synergies between buyer and seller
- Perform scenario analysis and simulate alternative transaction structures for risk assessment and management
Financing Model Development
When raising project finance, acquisition finance, or medium to long term corporate funding, banks and financial institutions typically require a verifiable financial model that can support stress testing of future cash flows as a basis for credit approval and financing terms. PwC helps you develop financing models that meet lender review standards and provide a common basis for negotiating terms, assessing repayment capacity, and evaluating creditor protection.
- Develop complex financial models that reflect financing arrangements across different periods and project cash flow dynamics
- Perform debt service capacity testing and financial ratio analysis
- Support communications with banks, investors, and other external stakeholders
Financial Model and Assumption Review
In transaction processes, investors often rely on financial models prepared by the seller or other advisors as a basis for evaluation. However, before making critical decisions, most investors seek an independent professional review of the model’s validity and reliability to reduce decision making risks from errors or biased assumptions. PwC provides independent and rigorous financial model review services to help ensure that the model is fit for purpose in supporting key decisions and external communications.
- Conduct comprehensive reviews of model structure and logic
- Assess the validity of key assumptions and parameters
- Review valuation and financing-related financial models
- Perform scenario analysis and stress testing
