Mark A. Coleman, Partner, Laurus Transaction Advisors
Amid all the challenges facing private equity firms today, preserving the value of their portfolio companies continues to be their focus. Value preservation often involves fundamental activities such as having confidence in financial information, the ability to analyze profitability and deriving accurate forecasts and operating metrics. Above all, the financial information needs to be actionable and informative.
The Deal: Carve-Outs: What you see isn’t always what you get
Patrick S. Martin, Partner and Mark A. Coleman, Partner, Laurus Transaction Advisors
Buying a piece of a business presents its own unique challenges. What is often presented as the historical results of the carved out business may not be in accordance with Generally Accepted Accounting Principles. To get the full picture, a detailed analysis of the historical trial balances must be performed considering intra-company transactions, allocated costs, shared services and potential stand-alone costs. Among many other specific considerations, buyers and sellers often underestimate the time and effort to complete a carve-out transaction.