Quality of earnings
Understand the performance behind reported results and the support for proposed earnings adjustments.
- Recurring versus non-recurring income and costs
- Revenue, margin, and profitability trends
Buy-side advisory
Understand the earnings.
See the implications.
Financial due diligence for private equity investors and strategic acquirers evaluating a business, an add-on acquisition, or a carve-out.
Discuss your transactionThe focus
Go beyond the
headline numbers.
A financial picture needs context. Reported earnings, working capital, and balance-sheet items can each affect how an investor understands a business and structures a transaction.
Highbury’s buy-side approach focuses on validating key value points, identifying potential deal issues, and connecting the financial findings to the investment decision. The scope is tailored to the transaction and the questions that matter most to you.
Areas of support
Financial questions.
Commercial consequences.
The work can be focused on a specific concern or developed into a broader financial due diligence scope.
Working capital
Assess the operating capital the business needs, including the effect of seasonality and changes in activity.
- Receivables, inventory, and payables trends
- Potential implications for a working-capital target
Debt and debt-like items
Identify financial obligations and balance-sheet matters that may affect the transaction economics.
- Debt-like considerations and potential exposures
- Items requiring agreement on transaction treatment
Quality of assets and cash
Examine how the asset base and cash requirements relate to the business’s reported performance.
- Balance-sheet quality and supporting schedules
- Cash conversion and areas needing further investigation
Carve-outs and transaction assumptions
Consider the financial implications of separating a business and the assumptions behind the investment case.
- Shared costs and potential standalone requirements
- Support for evaluating synergies and benefits
Financial deal support
Carry important diligence findings into the financial discussions around transaction terms and completion.
- Accounting and financial issues for the deal team
- Purchase-price adjustment and closing-statement support, where agreed
The engagement scope, deliverables, responsibilities, and timing are agreed for each transaction.
How we work
A focused process.
A usable view of the findings.
- 01
Frame the investment questions
Understand the business, transaction structure, priorities, and available information. Agree the scope and timing.
- 02
Analyze and challenge
Review financial information, develop analytical schedules, and discuss the issues with management and the deal team.
- 03
Connect findings to the decision
Explain the financial implications, distinguish supported adjustments from open questions, and identify matters that need follow-up.
- 04
Support the next step
Work through agreed financial deal issues and the handover into completion or ownership, where included in scope.
Potential deliverables
Clear findings you
can work with.
Depending on the agreed scope, the work may include:
- Quality of earnings analysis and supporting schedules
- Working-capital and debt-like item analysis
- A focused summary of findings, questions, and potential deal implications
- Financial support for transaction discussions and completion, where agreed
An experienced perspective
Transaction context.
Hands-on attention.
Highbury’s approach draws on Britton Woolf’s background in buy-side and sell-side financial due diligence for private equity and strategic acquirers, including complex carve-outs and divestiture support.
For an investor building conviction, a corporate buyer evaluating an acquisition, or a portfolio company considering an add-on.
Common questions
Before we begin.
Is financial due diligence the same as an audit?
No. Financial due diligence is tailored to a transaction and the buyer’s questions. It examines financial performance and relevant deal issues. It is not an audit opinion or assurance that every risk has been identified.
Can the work focus on specific issues?
Yes. The scope can be shaped around the transaction, available information, and areas of concern. A focused review and a broader diligence engagement have different coverage, which should be agreed at the outset.
How do you work with the wider deal team?
Financial findings can inform discussions with investment professionals, management, legal counsel, tax advisers, and other specialists. Each adviser retains responsibility for their own area; financial due diligence does not replace legal or tax advice.
When should the conversation start?
Once you have a potential transaction and enough context to discuss the business and your investment questions. An early conversation helps identify information needs, define the scope, and understand the timetable.
Get in touch
Evaluating an investment?
Start with the business, the decision, and the questions you need answered.