The Deal Checklist
Have we carefully reviewed both companies’ operating forecasts including methodology and rationale?
Have we received a detailed third-party review of the company’s financial statements?
Is our revenue pro-forma for the combined organization optimistic or realistic?
Are our pro-forma assumptions optimistic or realistic?
Have we considered in the pro-forma:
- To what extent have the company’s earnings been managed?
- What is the magnitude of historical excessive owner compensation and perks?
- What future changes might occur in the business, positive and negative?
Are the price and terms appropriate based upon the pro-forma?
How reliable is the company’s financial information?
What is the credibility of the company’s internal financial systems?
Is a reliability discount factor appropriate?
With the discount factor, are the price and terms still appropriate?
If the worst possible thing we can imagine actually occurs – CAN WE SURVIVE??
Did we review all former checklists?
Did we learn something new or conflicting?
Is there anything here that makes me want to walk away?
Should we continue?