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Transaction Due Diligence

Our philosophy is to help our client maximize the return from their deals. We offer a globally consistent, controlled deal process that helps you to minimize the risks associated with acquiring or selling a business, entering an alliance or raising capital. We provide a core team with the required skills to help you achieve the overriding objective for every deal: maximize the value of your deals.

The services we provide include:

Vender assistance / Sell Side(non-VDD)

Our vendor assistance specialists can advise potential vendors with certainty about the type and the extent of information to be provided to potential buyers, as well as assisting the vendors in the information preparation and the subsequent management interview process. Furthermore, our vendor assistance specialists are experienced in working alongside vendors' management and their lead advisers throughout the process, to ensure that opportunities as well as potential issues are understood, and the corrective steps are taken where possible.

In addition, PwC aims to value-add by affording vendors greater control over the entire sales process, and even potentially securing a higher sales price for the business by identifying and then assisting the vendors in addressing, to the satisfaction of both transacting parties, potential concerns and issues which may be picked up by the most demanding purchasers. All in all, for vendors contemplating sales of their own business, PwC's vendor assistance services provide bespoke solutions to successfully completing the divestments.

If this is your situation

  • Your company’s strategy involves disposing of part of the business, whether through a carve-out of business units, or by the sale of existing entities
  • Your company is in the process of restructuring/re-focusing its activities
  • You want to reposition your portfolio focus on core businesses, or return value to shareholders
  • You have started to feel pressure from financiers as a result of deteriorating financial ratios.

PwC can help you

  • Provide vendors with greater control over the sale process and the timing of sale, which can help secure a higher price for the business
  • Provide purchasers with greater certainty over the nature of the business and the characteristics of its cash flow. This helps pricing decisions and the level of gearing the structure will support
  • Reduce disruption to the business as the sale process is more controlled
  • Help add credibility to the facts, figures and information provided in the sales memorandum
  • Vendor assistance specialists can ensure that the vendor retains pace and initiative throughout the sale process
  • Early identification of value critical issues, providing the option to "regroup and fix" outside the glare of publicity
  • Rapid execution of the divestment from the point of announcement. This reduces the business disruption and accelerates transfer to new owner

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Structuring / Sales & Purchase Agreements

A number of different considerations can influence the optimal structure for a deal requiring a balance between the objectives behind the deal and accounting, tax, regulatory and commercial considerations. Our dedicated structuring experts assist with marshalling the complex range of factors including tax, legal, accounting and regulatory issues that will need to be considered together and advise on designing the optimal deal structure and how to effect transactions.

In any transaction, the Sale and Purchase Agreement (SPA) represents the outcome of key commercial and pricing negotiations. Purchasers and Sellers are becoming increasingly sophisticated in seeking to exploit the potential value to be gained through the negotiation and execution of the SPA. Our dedicated SPA team provides expert support at all stages of a transaction from pre-deal work through to post-completion support.

If this is your situation

  • You are considering acquiring or disposing a business and are looking for the optimal tax structure.
  • You are making an acquisition and wish to ensure that potential 'debt-like' items and other financial risks have been identified and appropriately addressed, either by way of a reduction in consideration, through a completion pricing mechanism within the SPA, or through warranties and indemnities.
  • The transaction being contemplated includes a post completion pricing mechanism. You are seeking to position the SPA to your advantage and to minimize the opposing party's potential to manipulate price.
  • You are contemplating the disposal of a business and wish to consider the relative merits of 'locked box' and other completion mechanisms in the context of your transaction.

PwC can help you

  • We help clients to identify the principal concerns that will determine the right structure for a transaction.
  • We create a feasibility plan to assess the chosen structure and once this is confirmed as the right choice we will provide continuous support throughout implementation.
  • We can work with you and your financial due diligence team to assist you in mitigating the risks identified during the due diligence phase.
  • We can advise you in your negotiations of the accounting aspects of the SPA. Such advice would include commentary on the pricing mechanism, relevant representations and warranties, any other accounting related clauses of the SPA and any dispute resolution mechanisms related to the purchase price adjustment.
  • We can advise you in your analysis of the working capital requirements of the Business with a view to you determining the normalized working capital for the purposes of your negotiation of the SPA.
  • We can advise you in your determination of the appropriate financial benchmarks (or appropriate adjustments to price in the case of a 'locked box' (fixed price) mechanism) and related arguments, for the purposes of price negotiation and drafting the SPA.

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Buy Side Due Diligence

We help acquirers understand and analyze the financial, commercial, operational and strategic assumptions underpinning each deal. Our in-depth reviews seek to uncover the reality of historical data so as to assist you to form a view of the prospects of the target company. We also help you to use the due diligence findings to their full advantage during the deal, from pricing/valuation to agreement negotiation.

After a deal closes, we can advise on how to improve the internal controls governing the target's financial, IT, back office, and front office management systems and processes.

If this is your situation

  • You want to strengthen your company's core business by acquiring rival or complementary products
  • You want to purchase a company to gain access to its existing products in new markets, or to increase your customer base

PwC can help you

  • By enhancing your understanding of the target business and therefore increasing the likelihood of the deal achieving its objectives
  • By helping you to identify and understand critical success factors so that informed acquisition decisions can be made
  • By highlighting underlying strengths of the target company that can be built upon or hidden weaknesses "black holes" that should be resolved
  • By identifying key deal issues (KDIs) of the target company that can assist you in price negotiation, devising appropriate protection clauses in the contract and early identification of post deal integration issues.

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Bid Support & Defense

Life in the public markets can be tough, sometimes requiring robust tactics to either make or defend a hostile bid.

  • For both bidders and defenders a hostile bid requires a thorough review of the vulnerabilities of a particular business. The bidder as well as the defender will come under intense scrutiny during the bidding process.
  • The scrutiny will focus particular attention on the management teams on both sides. They have to ensure that they position themselves well in the eyes of the market during the bid.• Experience of previous hostile bids is invaluable in mounting a robust defence and ensuring that the optimal outcome is achieved for shareholders.

If this is your situation

  • You are concerned about vulnerability to a hostile bid. There may be a number of reasons for a business to feel that it is open to a hostile takeover attempt. The sector may be experiencing a periodic downturn, there may be a problem with management succession or there may be criticism of performance from the market.
  • You are looking to acquire a public target in the coming months.

PwC can help you

  • We can help companies to examine the substance behind their fears by carrying out a "dummy" defence bid that will identify issues that from an external point of view may give rise to a bid.
  • For companies making hostile public bids, we prepare reviews on the bidder’s own business and analysis of the vulnerability of the target.
  • For companies defending a hostile public bid, our review helps the company’s management team to position itself well in the eyes of the markets during the bid.
  • We provide financial due diligence analysis to validate the financial, commercial, operational and strategic assumptions underpinning the deal.

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Vendor Due Diligence

When a company is up for sale, whether as a whole or parts of its operations only, it needs to show an in-depth report on its financial health to potential buyers. The processes which start from the related review and analytical work to the generation of the in-depth report are collectively referred to as vendor due diligence.

Vendor due diligence is an in-depth report on the financial health of a company that is being sold. It provides vendors with greater control over the sale process and the timing of sale, which can, in turn, help secure a higher price for the business.

While the goal of vendor due diligence is to present the historical financial/operational performance and future prospect of the business being sold in detail, thus allowing that potential buyers to understand and assess its financial health/operational efficiency with confidence. Vendor due diligence also aims to address the concerns and issues that may be relevant to even the most demanding purchaser.

If this is your situation

  • Your company’s strategy involves disposing of part of the business, whether through a carve-out of business units, or by the sale of existing entities
  • Your company is in the process of restructuring/re-focusing its activities
  • You want to reposition your portfolio focus on core businesses, or return value to shareholders
  • You have started to feel pressure from financiers as a result of deteriorating financial ratios.

PwC can help you

  • Provide vendors with greater control over the sale process and the timing of sale, which can help secure a higher price for the business
  • Provide purchasers with greater certainty over the nature of the business and the characteristics of its cash flow. This helps pricing decisions and the level of gearing the structure will support
  • Reduce disruption to the business as the sale process is more controlled
  • Help add credibility to the facts, figures and information provided in the sales memorandum
  • Remove the necessity for a buyer to have substantial access to do their own due diligence work as they will be able to rely on the vendor due diligence report
  • Early identification of value critical issues, providing the option to "regroup and fix" outside the glare of publicity
  • Reduces uncertainty risk for finance buyers, potentially justifying higher offers.

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Contact us

Kenneth Liu

Managing Director

Tel: +886 2 27296666, x25831

Lily Wong

Managing Director

Tel: +886 2 27296666, x26703

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