Financial Due Diligence

The buyer is normally at a distinct disadvantage when it comes to information. Effective buy-side financial due diligence is critical to making informed buyer decisions, managing risks and maximizing the potential return on investment. Starting with a thorough assessment of the quality of earnings, Weaver’s rigorous due diligence process enables buyers to rationally decide whether a deal is viable, understand potential deal-breakers, identify and confirm potential upsides and assess the transaction’s overall value and optimal transaction structure.

Focus areas: 

• Supplier risk and concentration
• Effectiveness of the executive team and support staff
• Gross and net margin trends and impact of factors such as pricing and cost trends, product mix and volume and accounting methods that impact margins
• Evaluation of capital requirements of the business
• Human resources policies, employee compensation and reward structure and benefits
• Existence of commitments, contingencies and debt-like characteristics of the company
• Purchase and sale agreement deal terms such as disclosures, representations, warranties, indemnification and true-up mechanics

Sellers who proactively assess their business are more likely to control the narrative, reduce surprises and preserve value when going to market. Weaver’s sell-side due diligence team anticipates buyer concerns and proactively addresses potential issues to minimize disruption and strengthen your position. We evaluate the readiness of your business and financial records, identify key value drivers and streamline documentation to support a smoother, more efficient transaction. Our approach helps you maintain control, reduce management distractions and close with greater confidence.

We work toward:

• Assessing the sell-side readiness of the business and accounting records
• Identifying potential negative issues and allowing management to proactively address them
• Finding value drivers and working to ensure the transaction price and structure rewards the seller
• Organizing documentation so the buyer’s due diligence is efficient, limits disruptions and results in fewer surprises
• Providing more control and confidence over the transaction process

Divestitures and carve-outs present unique challenges, from separating shared operations to preparing stand-alone financials that hold up to scrutiny. Success depends on identifying value-impacting details and ensuring the carve-out structure supports strategic and financial goals. Weaver’s team evaluates the transaction from both buy-side and sell-side perspectives, applying industry experience and deep financial analysis to guide you through each stage. Whether you’re preparing for sale or executing a strategic separation, we can help clarify key drivers, assess cost allocations and deliver the insight needed to support clean execution.

Our divestiture and carve-outs team:

• Considers the implications of carve-outs and restructuring
• Evaluates key business drivers and synergies
• Assists with assessments and reviews of shared costs, allocation methodologies and key other assumptions
• Assists with presenting stand-alone historical financial statements
• Helps define and understand working capital

A quality of earnings (QofE) analysis offers an independent, clear view of a company’s sustainable financial performance by separating recurring results from one-time events. Prepared for mergers and acquisitions (M&As) or divestitures, the QofE analysis evaluates historical financials, identifies risks and opportunities and evaluates key factors like normalized working capital and net debt. Weaver’s QofE process is based on a thorough understanding of the complexities involved in M&A transactions. The result: sharper insight, stronger deal positioning and fewer surprises at the negotiating table.

Working capital plays a critical role in M&A transactions, often impacting both the purchase price and post-closing negotiations. Weaver helps you assess and document working capital trends, uncover value implications and negotiate clear terms that reduce post-close disputes. Our approach supports a stronger position at the deal table and a smoother post-transaction process, prioritizing that expectations around working capital are aligned from the start.

We help clients:

• Document the entity’s cash-conversion history and risks
• Identify seasonal working capital requirements
• Provide deep insight into the financial implications of purchase agreement clauses, such as purchase price adjustments and escrows
• Help the buyer consider the value implications of the company’s working capital position and history
• Form the basis for post-closing adjustment mechanisms that avoid value leakage
• Assist in understanding how financial terms can affect the final transaction value