When entering into an M&A deal, it is important to fully understand potential deal issues, risk areas, and opportunities to create value or reduce liability. In this TRU Snacks session, we covered the intricacies of buying a company and how a quality of earnings report can provide much needed insights to assist in the purchase.

1. Benefits of a Buy-Side Quality of
Earnings Report
January 21, 2021 | TRU Snacks Webinar Series

2. DAVID ZAWITKOWSKI, CPA
Director, Transaction Advisory Services (TAS)
Citrin Cooperman
dzawitkowski@citrincooperman.com
973.218.0500
Welcome &
Introduction

3. AGENDA
Wh at i s D u e D i l i gen ce?
01
B u y-Si d e Ser vi ces 02
C OVI D R el ated C o m pli cati ons 03
B en efi ts o f a Qu al i ty Ear n i n gs R ep o r t 04

4. Assessing a business before buying it
a.k.a. “Doing your homework”
a.k.a. “Kicking the tires”
What is Due Diligence?

5. Pre-LOI
Period
High-level due diligence
(looking for issues and red
flags) often at no charge to
build goodwill
Services:
- Quality of Earnings (QofE) report
- Tax due diligence
- IT due diligence
- Tax structuring
Services:
- Inventory observation
- Closing working capital calc
- Recurring audit/tax work
- Purchase price allocation
Services:
Overview of Buy-Side Services
Letter of
Intent
(LOI)
Due Diligence
Period
Purchase
Agreement
Post-Closing
Period

6. COVID Related
Complications
▪ Companies in crisis mode or
recovering
▪ Fewer quality deals
▪ Overall diligence taking longer
▪ Deal structures more complicated

7. COVID Adjustments
▪ Based of facts and data
▪ One-time, quantifiable costs
▪ Pro-forma adjustments
▪ Net working capital implications

8. ▪ Understand what you are buying
▪ Save money (purchase price adjustments)
▪ Negotiate better terms
▪ Change deal terms
▪ Decide not to buy
Benefits of a QofE

9. Questions?

10. Thank You
For Watching & Listening
DAVID ZAWITKOWSKI, CPA
Director,Transaction AdvisoryServices (TAS)
Citrin Cooperman
dzawitkowski@citrincooperman.com
973.218.0500