Fall 2015 Issue of Horizons

PRIVATE EQUITY

Ethical Negotiations & the Role of Sell-Side Due Diligence by Ben Barnes, CPA, CGMA & David Schomer, CPA

T ransactions in today’s complex business and financial environment can be daunting. Sellers seek to present their companies in the best light possible, while buyers search for target companies that they believe will deliver the highest return on investment. Even when good-faith disclosure is at the forefront of a seller’s mind, many business owners may struggle to determine what information is relevant to the sale process and how its presentation could affect a transaction, especially with respect to valuation.

Taking a disciplined, thoughtful and honest approach to gathering and presenting information to buyers can positively influence buyer trust and greatly impact the negotiations in the transaction. Due Diligence When a company is looking to acquire another company, it is common practice for the buyer to contract third parties, such as public accounting firms, law firms and customer diligence firms, among others, to analyze the prospective company to be acquired.

page 22 | horizons Fall 2015