Acquisition Due
Diligence

Acquisition Due Diligence for Banks and Institutional Debt Providers

LCG’s acquisition due diligence analyses provide banks and institutional debt providers with in-depth evaluations of a borrower’s financial health, operational risks, and future performance prospects. These analyses provide the confidence needed to structure loans or financing packages with optimal risk mitigation. LCG also offers complementary services, allowing assessment of all facets of the transaction without the need for multiple providers, ensuring an efficient and informed lending process.

In completing more than 200 engagements annually, LCG has a broad base of clients, including:

Private Equity Firms
Family Offices
Independent Sponsors
Searchfunders
Mezzanine Funds
Senior Lenders
Investment Banks (Sell-Side Prep)

Service Offerings

Buy-Side Full Scope Acquisition Due Diligence

LCG’s professionals have extensive experience performing buy-side acquisition due diligence across a variety of different industries. Many of our professionals are CPAs with backgrounds in Big Four audit and transaction advisory services. Furthermore, we primarily work with family- and founder-owned businesses. We have developed a unique approach to working with business owners, characterized by our friendly demeanor and professionalism, which protects the dynamics of the transactions we’re involved in. Our experience, high-caliber professionals, and unique approach allow for a more efficient financial diligence process (i.e., average 3-week turnaround time) while still delivering robust and quality analyses.

Buy-Side Focused Diligence

Flexibility is needed at this end of the market. As such, LCG can perform focused diligence engagements by catering the scope to match the specific needs of a given transaction. This approach enables greater budget flexibility when reducing deal costs, while also improving efficiency and achieving even quicker turnaround times. Our focused diligence engagements can range from a simple “proof of cash” analysis to a more robust “QoE lite.”

Sell-Side Prep

Although most of our engagements are buy-side in nature, we perform a significant number of sell-side engagements annually to help lower-middle-market sellers prep for an imminent transaction. We approach a sell-side engagement similar to a buy-side engagement with the same level of scrutiny and integrity to better prepare sellers for a buy-side process. Our goal is to walk sellers through the financial diligence process and avoid the surprises and headaches that can come with going through a traditional buy-side process.

Additional Services Upon Request

We often perform analyses as part of our scope of an acquisition due diligence or focused diligence project, which includes (but is not limited to):

Analysis and pro forma adjustments related to potential deferred revenue
For Companies utilizing the percentage of completion method of recognizing revenue and costs, we evaluate the methodology of management and propose pro forma adjustments as necessary
Assist clients with creating and projecting pro forma working capital and setting target working capital
Assist with compiling or creating financial projections, including balance sheet projections, income statement projections, and cash flow projections
Perform sampling and testing to gain comfort over source data used in revenue recognition
General financial accounting consulting to assess financial records and propose correcting journal entries
Carve out due diligence