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Transaction services include all services required for M&A transactions or corporate finance advisory.

We are also happy to provide support with individual transaction components such as company valuations, financial due diligence or advice on purchase price structuring.

Transaction or M&A advice is understood to mean advice to entrepreneurs or investors before, during and after acquisitions or sales of companies or shares in companies.

The results of the due diligence are summarised and documented in a report – the due diligence report. Often, the audit results are also used to define necessary actions for the time after the M&A transaction in order to revise critical processes or weak points for the future. 

In due diligence, various areas of the company to be acquired are examined in detail. Tax, legal, financial, ESG and commercial are the minimum scope of a due diligence today. Company-specific topics are often additionally examined depending on the risk profile. ABACUS will be happy to support you together with our network partners in carrying out your due diligence.

Due diligence is usually charged at hourly or daily rates. In many cases, commercial and ESG due diligence is performed by the buyer; tax, legal and financial due diligence is usually performed by external due diligence consultants.

The costs of this external due diligence package are usually between 100T€ and 300T€ for medium-sized companies.

The effort required for due diligence depends on the complexity of the corporate structure and the quality and quantity of the documents prepared for review in the data room.

Typically, due diligence takes 4 to 12 weeks with a prepared data room, but if no data room is prepared and all information has to be requested separately from the seller, due diligence can take 4 to 6 months.

After due diligence, the audit results are incorporated into the purchase contract negotiations (e.g. in the catalogue of guarantees). Often part of the purchase price is financed by external financing partners such as banks, in which case they also expect the due diligence report as part of their own review before a commitment.

Vendor due diligence (VDD for short) is commissioned by the seller before approaching investors in order to have the actual state of his company examined and presented by external, neutral due diligence consultants. The reputation that these consultants enjoy in the market leads to investors starting their own due diligence with a certain advantage in terms of confidence, and possible focal points of the audit are already apparent from the vendor due diligence. The preliminary work done with vendor due diligence significantly shortens the M&A process in the phase of external communication with potential investors.

M&A transactions with a strategic rationale are often analysed and permanently controlled by the controlling department of the acquiring company during and after the M&A process with regard to the attainability of the strategic goals. Thus, controlling is often already involved in the financial due diligence and the preparation of the internal business plan and thus also in the valuation of the company (part) to be acquired.

After the acquisition, controlling works on the development and implementation of the integration strategy and checks the fulfilment of the business plan

There are various methods to determine the value of a company.

If a detailed business plan including profit and loss account, balance sheet and cash flow is available, a detailed discounted cash flow method (DCF for short) can be applied. Here, future financial surpluses in the form of cash flows are discounted to the valuation date. 

If there are comparable public company transactions or comparable listed companies, a multiples method is feasible with significantly fewer key figures of the company. 

For example, this simplified method uses the average EBIT (earnings before interest and taxes) of the last 3 years multiplied by the relevant industry multiple (often between 4x and 8x) and the net financial liabilities subtracted.

In most cases, a complete business valuation takes about 2 to 4 weeks. It is important to bear in mind that a detailed business valuation requires an integrated business plan that includes profit and loss account, balance sheet and cash flow. 

Only when this detailed planning has been prepared together with the management can the M&A advisor carry out the business valuation and subsequently document it, including explanations and comments.