Presentation of financial due diligence

1. TRANSACTION
SERVICES:
30 ANNI DI
ESPERIENZA AL
VOSTRO SERVIZIO
DILIGENCE
DUE
F I N A N C I A L

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ü Our team provide corporate entities, private
equity investors, and lenders with a wide
range of finance, accounting, and business
advisory services. Our Transaction Advisory
team supports all forms of mergers,
acquisitions, business combinations,
investments, and financing arrangements, on
both the buy side and sell side.
ü Our team has deep large-firm financial,
accounting, and tax expertise across a wide
variety of industries. We cover both domestic
and cross-border transactions leveraging the
strength of our global organization. Our experts
provide insights to help you identify valuable
information, including key drivers and risks
associated with a business that could impact
the deal structure and value.
ü Who we serve:
• Private equity funds
• Corporate development directors
• CFOs
• Corporate controllers
• Corporate boards
DILIGENCE
DUE
F I N A N C I A L
Key aspects

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1 The objectives of
financial due diligence
The due diligence process is much more than a standard checklist
of procedures in order to provide approval for a proposed acquisition.
When done properly, a financial due diligence review provides valuable
information to support the proposed acquisition.
By understanding the rationale for your proposed investment, as well as
those matters which you have already identified as being of concern to
you, we will focus on the issues that are the most important for
your investment decision.
Due diligence allows the buyer to feel more comfortable that his or
her expectations regarding the transaction are correct. In mergers and
acquisitions (M&A), purchasing a business without doing due diligence
substantially increases the risk to the purchaser.
Our work may relate to an acquisition of the shares in a company
or its assets (or a group of assets) as well as the organised part of
the enterprise. We conduct our projects in close cooperation with our
clients and the investor’s other advisers, which enables us to achieve
complete understanding of investors’ expectations and provide high-
quality deliverables.
FINANCIAL DUE DILIGENCE

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OURSERVICES
2
FINANCIAL DUE DILIGENCE
We assist buyers in understanding the key value drivers and risks
associated with proposed transactions. Our focus is on identifying
issues that may affect quality of earnings, which ultimately impact the
valuation and purchase agreement. Our diligence focuses on the following
key areas:
1. Quality of Earnings – Analyzing the key drivers of the business and
evaluating the quality and sustainability of EBITDA
2. Quality of Assets – Assessing the composition of the target’s net
working capital and evaluating the working capital trends and
requirements
3. Net Debt – Identifying potential exposures, obligations, and
contingencies
4. Other Matters – Analyzing historical accounting policies, quality of
reporting/information, quality of finance team, and identifying other
potential risks

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3 Deriverables of
financial due diligence
The deliverables for a financial due diligence project can differ
enormously. It’s depend on the need of the buyer. Here are some of
the contents of our standard financial due diligence report:
ü Analysis of the financial situation
ü Executive summary of key findings
ü Overview and workings of financial business drivers including
possible risks
ü Purchase price adjustments to the result (EBITDA adjustments)
ü Check of financial forecasts and opinion on the achievability of these
financials
ü Cash flow-analyze (CAPEX, OPEX and further required capital)
ü Assessment of future management forecasts
FINANCIAL DUE DILIGENCE

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Tax due diligence
4
FINANCIAL DUE DILIGENCE
Our experience indicates that identified tax risks can have a
significant impact on the market value of the target company and
might constitute a crucial argument in price negotiation process. The aim
of the tax due diligence is the analysis of the target’s tax
treatment in respect of its consistency with Italian tax regulations,
legislation of the administrative courts and the instructions issued by the
Italian Ministry of Finance. Our services in respect of tax due diligence
include, in particular, analysis of the target’s tax settlements and social
security contributions in order to identify tax risks and analysis of
decisions concerning historical tax controls undertaken by relevant
authorities.

7. 6
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