Financial due diligence of SME targets on behalf of an engineering group
Context
An engineering group comprising SMEs pursuing a strategy of organic and external growth
As part of the acquisition of several engineering consultancies, H4 Partners was engaged by the managing director to conduct financial due diligence on the targets.
Objectives
Conduct a financial audit of the various targets in order to identify potential opportunities and risks
Deliverables achieved
A financial audit report of around 20 pages for each target, comprising:
An analysis of the income statement (focusing on turnover, payroll costs, etc.)
An analysis of the balance sheet, focusing on the most significant customer and supplier contracts
A reconciliation with cash flows
An analysis of the main tax risks
A 12-month P&L and cash flow forecast
Excel file containing all historical and forecast analyses
Key success factors
Analysis of the targets’ past performance using the same indicators as those applied to Group companies, facilitating review by the CEO and CFO and the future integration of the targets into the Group
A pragmatic, structured and clear approach
Comprehensive review covering all risks (financial and business-related)
Tools used
The target company’s data room, containing FEC files, balance sheets, key contracts, payroll reports, etc.
Development of an application with a validation workflow for managing annual restatements. Finance transformation | Transformation of the finance function | Mid-cap and large group
Creation of investor reports and monitoring of valuations using Power BI. Development of Power BI dashboards | Modelling and performance analysis | Funds
Carried out a transition assignment between two FP&A directors in a mid-cap company. Financial and operational management | Outsourced FP&A | Mid-cap and large group
