Securities Products and Investment Banking Services are offered through BA Securities, LLC, 

Four Tower Bridge, 200 Barr Harbor Drive, Suite 400, W. Conshohocken, PA 19428, (484) 412-8788

Member FINRA/SIPC

 

 

Romanchuk & Company, PLLC and BA Securities, LLC are separate and unaffiliated entities.

© 2019 Romanchuk & Company, PLLC

Considering a Business Acquisition?

February 2, 2016

 

You wouldn't perform a surgery on yourself. The same holds true when buying a business. Unless you're well-versed in performing a comprehensive financial analysis of a business, it doesn't make sense to buy one without using a due diligence and valuation specialist. A due diligence report:

  • Verifies the accuracy of the seller's information.

  • Outlines a detailed understanding of the business.

  • Contains vital information that can be used for negotiating the transaction, obtaining financing, establishing the tax and accounting basis of the assets, and integrating the acquired entity into the buyer's business.

Most of all, due diligence identifies possible deal-breakers. A seller may "prepare" a business for sale, making it look better than it really is, in order to obtain a higher price. A professional due diligence review guards against the overstatement of assets and understatement of liabilities. It also provides an analysis of historic earnings and the likelihood that forecasted operations can be met.

 

One crucial, but often overlooked, part of due diligence involves the tax consequences of the proposed transaction. Depending on the operating structure of the acquiring company and the target (for example, a C corporation, S corporation or partnership), it may be better to receive assets versus stock. Keep in mind that a badly structured sale can result in a tax disaster.

 

At Romanchuk & Company, our transaction service approach is unique.  We approach our quality of earnings reports and financial due diligence engagements with the thoroughness of an accounting firm and from the perspective of seasoned deal and industry professionals.  The result is a purposeful, detailed approach that produces an informative and insightful analysis of the target business...all at a reasonable value to the client.

 

 

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