Mergers & Acquisitions and the need to do a 3rd party audit prior to a conclusive financial agreement

Adrienne BraumillerPartner, Braumiller Law Group, PLLC

Quite often, mergers and acquisitions fail to live up to the revenue generating expectations laid out in the original blueprint for success. Companies have a tendency to focus on quick-fix cost-cutting opportunities (like an overlap in personnel and overhead) and ignore what should have been an elephant in the room, and could impede the long-term supply chain strategy.

Specifically what I am referring to is a possible missed opportunity to fully audit the supply chain one is purchasing that can often come with many surprises, (land mines if you will) like past due duties owed on product that was previously seized, and/or fined by Customs upon entry into a particular country. It may not be as transparent as one would prefer during the M&A review amid discussions on how to increase productivity and profit, and therefore could end up being an unwanted surprise in the form of penalties or significant duties needing to be paid after closing. Sometimes, this can be in the millions based on our first hand experience.

We understand this oversight well and we’re committed to assisting companies in truly understanding the value of the deal before it’s too late. Many companies embark on mergers and acquisitions (M&As) with high hopes, promising a prosperous financial outcome for investors via improved performance and greater revenues, only to find a large chink in the armor after the sale.

Our recommendation is not a sales pitch, but an observation. In the process of an M&A, one may wish to consider a 3rd party audit of the supply chain, just to vet for discoveries that may end up as part of the final negotiations on price, prior to closure. It’s what we do: Braumiller Law Group, and Braumiller Consulting Group.

O.K…it’s a sales pitch to some, to others, sound advice based on experience

Contributing Advisors

Bob BrewerMarketing VP, Braumiller Law Group, PLLC