MODULE EXAMPLE: M&A Due Diligence

Objectives Solution Results

Background / Objectives

Due diligence is a critical part of any M&A transaction. The due diligence process helps the acquiring company explore the validity and accuracy of its valuation assumptions and identify possible hidden areas of value or liability. Due diligence includes strategic, financial and operational evaluations of the target to:

• assess proper strategic fit
• make realistic financial projections
• facilitate post-acquisition integration of the two entities.

Solution

PortBlue's Due Diligence module is designed to help assess confidence in the attractiveness of a target by leading the user through a set of prioritized, detailed analyses on that company. These analyses help highlight issues and concerns that could materially affect the target's value.

PortBlue's Due Diligence module:

• Develops a framework for managing and coordinating the due diligence process.
• Compiles a prioritized list of required materials for performing the due diligence process.
• Prioritizes and assigns due diligence-related tasks.
• Highlights possible areas of uncertainty or risk.
• Helps the user understand some of the common pitfalls and complexities regarding due diligence.
• Assesses certainty regarding the attractiveness of the target.

To help manage the due diligence process, the PortBlue module breaks down the main tasks and analyses of strategic, financial and operational due diligence into four sections:

• Quality of Earnings
• Quality of Balance Sheet
• Hidden Liability Exposure
• Quality of Operations

Each section is composed of multiple subsections, which are prioritized based on the acquiring company's unique circumstances.

Results

The Due Diligence module presents users with results at interim points in the process, as well as a summary report.

Interim Findings:

• A prioritized list of required materials
• A prioritized list of due diligence-related tasks

Summary Results:

• A listing of areas where more work or professional help may be required
• An outline showing possible areas of risk to a successful acquisition
• An attractiveness/certainty matrix for the target company for each section and subsection