M&A Financial Due Diligence
Navigating complex mergers, acquisitions, or divestitures in China demands both precision and strategic insight in a market shaped by rapidly evolving industry dynamics and regulatory nuances. Our M&A Financial Due Diligence service delivers just that, bridging analytical rigor with forward-looking guidance tailored to China’s unique business environment.
By combining a forensic review of financials with operational and strategic analysis, we help uncover both overt and hidden value in potential targets. This enables you to assess alignment with your objectives, validate pricing, and identify synergies and risks before any deal is struck. Going beyond the numbers, we evaluate profitability at the level of product lines, customer segments, and operations; assess working capital efficiency such as receivables, payables, and inventory flows—and scrutinize capex trends to form a clear picture of future investment needs.
Our support doesn’t end at the deal—our post-merger integration services help align budgets, monitor synergy realization, and establish clear performance metrics that hold both sides accountable. Whether it’s preparing for negotiations, structuring financing, or measuring long-term return on investment, our diligence framework ensures confidence, continuity, and value creation through every stage.
Our M&A Financial Due Diligence support provides the financial insight, operational analysis, and strategic support needed to evaluate, structure, and execute transactions.
Evaluation whether an acquisition, merger, or divestiture aligns with the strategic and financial goals of the company. Key services include:
Strategic Fit Analysis
- Assessing synergies between the target and acquiring company in terms of cost structures, market position, and operational efficiency.
Financial Modelling & Forecasting
- Creating scenario-based models to predict the impact on revenue, costs, and profitability under various integration assumptions.
Valuation Support
- Assisting in target company valuation using management accounting data (e.g., contribution margins, product line profitability, cost-to-serve analysis).
Risk Assessment
- Identifying operational, market, and financial risks that could affect the value of the transaction.
Offer deeper operational insights than financial statements alone.
Profitability Analysis
- Reviewing segment, product, and customer-level profitability to identify high-value drivers and underperforming areas.
Cost Structure Analysis
- Breaking down fixed vs. variable costs and identifying potential cost synergies post-acquisition.
Working Capital Assessment
- Evaluating receivables, payables, and inventory turnover to optimize cash flows after the transaction.
Capital Expenditure Planning
- Reviewing historical capex and forecasting future investment needs to sustain growth and integration
Structuring the deal to achieve optimal financial outcomes:
Synergy Modelling
- Quantifying cost savings and revenue enhancement opportunities.
Integration Cost Estimation
- Identifying one-off and recurring integration expenses.
Financing Analysis
- Assessing the impact of debt vs. equity financing on the company’s future performance.
Performance Metrics Design
- Establishing KPIs to monitor post-deal performance.
After the deal closes, support focuses on ensuring smooth operational and financial integration.
Budget Alignment
- Integrating financial plans, budgets, and forecasts of both entities into a unified framework.
Cost Synergy Tracking
- Measuring and reporting on the realization of anticipated synergies.
Operational Performance Management
- Monitoring productivity, quality, and customer service during the integration phase.
Change Management Support
- Providing decision-relevant financial data to facilitate organizational and operational changes.
For sustained success, support includes the establishment of systems to track whether the M&A is delivering the expected value.
Balanced Scorecard Implementation
- Linking strategic objectives with financial and non-financial performance indicators.
Variance Analysis
- Comparing actual results against forecasts to identify deviations and corrective actions.
Continuous Improvement Insights
- Using activity-based costing and other tools to refine operational efficiency.