M&A Talk (Mergers & Acquisitions), by Morgan & Westfield

An Introduction to Financial Due Diligence for Sellers

Jun 21, 2023

Nicholas Spezio, a strategic boutique advisor for growth-stage companies, shares invaluable insights on financial due diligence. He emphasizes taking time during the closing process to ensure thorough evaluations. The discussion highlights integration challenges, especially in tech deals, and the importance of accurate revenue management. Nicholas also contrasts the financial needs of startups versus established firms, while advocating for well-organized financial records to ensure seamless transitions. With a blend of expertise and humor, he navigates the complexities of M&A.

31:52

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Nicholas Spezio

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Episode notes

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Quick takeaways

Proper financial due diligence is vital for establishing a strong foundation for post-acquisition integration, ensuring accurate assessments of the target company's financial health.

Integrating unstructured data from diverse accounting systems poses significant challenges in M&A, necessitating the use of technology to achieve operational efficiency during transitions.

Deep dives

Importance of Financial Due Diligence

Financial due diligence is crucial in the mergers and acquisitions (M&A) process as it establishes a solid foundation for successful integration post-deal. By diving deeply into the financial statements, including the general ledger and bank statements, due diligence provides insight into the target company's financial health. This process involves creating detailed pro forma financial statements and a quality of earnings report that inform buyers about the true earnings and EBITDA numbers. Understanding these elements before closing allows buyers to effectively assess risks and make well-informed decisions regarding the acquisition.

Intro

2min

Navigating M&A: Insights and Innovations

13min

The Crucial Role of Financial Due Diligence in Integration

3min

Exploring Financial Due Diligence in Various Sectors

2min

Navigating Financial Diligence in Tech Deals

9min

The Art and Science of Financial Due Diligence in M&A

4min

Don’t rush to the closing – take the time to do financial due diligence properly. That’s the advice from Nicholas Spezio with Exbo Group, a strategic boutique advisor for growth-stage companies. He discusses the integration process, the objectives and advantages of doing financial due diligence, the problems with going too fast during the sale process, why financial due diligence is the most challenging part of integration, and how to set a company up for success with a seamless integration.

View the complete show notes for this episode.

Learn More:

Additional Resources:

Download a free pdf copy of The Art of The Exit: The Complete Guide to Selling Your Business.
Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal | Acquired
Planning to sell your business? Schedule a free consultation today.
To suggest guests, topics, or questions for future podcast episodes, contact Morgan & Westfield.
Contact Morgan & Westfield to request a free copy of Jacob Orosz's latest book, Food and Beverage M&A: An Insider's Guide to Selling a Food or Beverage Business.

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