Doing M&A transactions abroad (especially in Brazil) without the right business advisor may be a risky move. Behind attractive numbers reported by the target, there may be hidden unknown contingencies that-if identified-may be important deal-breakers.
Our analysis consists of understanding the target’s business & operation, analyze and validate financial margins & pro-forma adjustments, and identify elements and transactions that may increase or decrease the reported EBITDA.
Since Tax strategy-both corporate and payroll-are key for those doing business in Brazil, as part of our analysis, we investigate potential issues, hidden liabilities, and contingencies that may arise from target’s tax practices and approach.
Our Due Diligence Team has broad experience in Financial and Tax Due Diligence deals in a vast number of segments and involving both domestic and multinational players.
See below the main elements that play a key role in our Due Diligence practice:
- Assessment of the Company’s historical and future performance
- Assessment of the Company’s compliance with applicable laws and regulation (FCPA, GDPR, Anti-bribery laws, local specific industry regulation and other)
- EBITDA normalization and adjustment in order to quantify any financial impacts affecting the acquisition price.
- Working Capital analysis and adjustment.
- Analysis of the Company’s practices regarding Federal, State and Municipal Tax and quantify liabilities and related contingencies.
- Assessment of the Company’s adherence to Tax ancillary obligations, and quantify liabilities and related contingencies.
- Analysis of the Company’s practices regarding Payroll Taxes and Charges, as well as other labor obligations, and quantify liabilities and related contingencies.
- Identification and quantification of potential contingencies arising from lawsuits (primarily labor lawsuits).
- Assistance in the estimation/calculation of the acquisition price adjustments
- Post-acquisition assistance with auditing and preparation of the opening balance sheet.