Preparing for a Transaction

Clients often underestimate the complexity of a transaction process and being fully prepared is key to success


One of the most common reasons why transactions fail is because the selling party (or party seeking funding) is not fully prepared for a rigorous transaction process. Whether you are seeking to sell your business or looking for funding, the process will involve various due diligence streams, including financial, tax, legal and commercial.

Knight Corporate Finance often work with clients over a long period of time before starting an exit or investment process, and now we are part of K3 Capital Group we can expand on the services we offer to assist business owners and management teams in preparing for a transaction.

Our transaction preparation services include:

  • Strategic Support – ensuring business strategy is aligned with shareholder objectives and maximising value
  • Vendor Assist – a data-driven dry run due diligence process
  • CFO Services – on-going CFO support and model review as we build up to transaction readiness

Our support can be tailored to your specific requirements and does not have to include all of the above services.

We worked with Knight over a number of years prior to our transaction with Focus Group. Knight ensured that we focused on what most drives value and its Vendor Assist process ensured we were very well prepared for the various due diligence streams of the transaction itself
Mandy Fazelynia
CEO of Zest4

Strategic Review

We undertake an initial review of the business by getting to understand current business strategy and shareholder objectives. The main deliverable will be an analysis of the strengths, weaknesses, opportunities and threats (SWOT), and how the current strategy is placed in terms of maximising value in the current market.
We tailor our strategic support to your needs and expectations, which can include:

  • Understand the objectives and aspirations of the shareholders and management team
  • Identifying the strengths and weaknesses from trade buyer and investor perspectives
  • How to maximise opportunities, address weaknesses and mitigate threats
  • Valuation and what the key drivers are
  • Identification of any areas where expertise or scale requires acquisition or resource
  • Review of existing product set and identify options that add long term value
  • Review of management team
  • Identification and review of potential acquisitions
  • Market analysis and competitor benchmarking
  • Sector M&A trends
  • Provision of on-going Non-Executive Director support

Vendor Assist

Our Vendor Assist service is split into 3 phases:

  1. Vendor Assist Scorecard
  2. Commercial Vendor Assist
  3. Integrated Financial Vendor Assist

Vendor Assist Scorecard

  1. Complete the Vendor Assist Scorecard here
  2. Review results, share information, provide an initial valuation and deal options and agree next steps

The purpose of this phase is:

  • Understand if the business is in a position to undertake a sales or investment process
  • Understand what the main risks to a potential sales or investment process will be
  • Provide clear guidance on any corrective action that needs to be undertaken before starting a sales
    or investment process
  • Give an initial view of valuation and deal options based on recent transactions of a similar size and nature

Commercial Vendor Assist

  1. Using the initial results from the Scorecard, we will review in more detail key elements of the business, including the review of key contracts, analysis of the customer base and review of operational structures
  2. Produce detailed Commercial Vendor Assist report

The purpose of this phase is:

  • Ensure all financial information is available
  • Highlight any potential financial or taxation risks
  • Highlight any potential commercial risks
  • Highlight any potential corporate, legal or employee risks
  • Validate valuation
  • Highlight potential risks to maximising value
  • Set out potential transaction options
  • Provide clear guidance on any corrective action that needs to be undertaken before starting a process

Integrated Financial Vendor Assist

Delivered by K3 Advantage

Delivered by K3 Advantage, our CFO services will provide a financial model, KPI dashboards, and on- going CFO support.
The initial process will start with building a robust and fully integrated 3 year forward integrated model and supporting KPI dashboards.

  1. Produce detailed financial information data pack
  2. If required, on-going CFO support leading up to the transaction

The purpose of this phase is:

  • Gather all data
  • Produce bespoke analytic dashboards to enhance the FDD process
  • Produce a robust set of data books with a 3 year look back that are FDD ready

This will be augmented with the provision of on-going CFO support services to continue reviewing and updating the model on a monthly basis as we build towards a transaction process.

This will enable prospective buyers to efficiently understand your value drivers and help them evaluate a post-deal strategy that builds on the existing growth story.