"It is easy to consider the positive aspects of an acquisition. Brandlin & Associates' objective scrutiny made us aware of issues that lowered the target's valuation. With Brandlin's help, we successfully negotiated a deal with the seller, knowing that we were not overpaying."
- David Danglard, CEO, K1 Speed, Inc.
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Smart Shoppers - Add-on Acquisitions
Does the following checklist sound familiar?
- Identified attractive platform investment. CHECK
- LOI signed. CHECK
- Prospect passed thorough due diligence process. CHECK
- Negotiated price and terms. CHECK
- Closed deal. CHECK
- Portfolio company CEO identified add-on acquisition. CHECK
Now what? As investors, you trust the CEO's knowledge of the industry. The target is not a large business. The CEO is excited to move forward. How much should you invest in due diligence?
We recently were retained by Praesidian Capital's portfolio company, K1 Speed, Inc., to provide financial due diligence for an add-on acquisition. K1 Speed is the nation's largest operator of indoor go-kart racing tracks and has been successful at building sites from the ground up. Since we had provided financial due diligence on K1 Speed in advance of Praesidian's investment less than a year earlier, we entered the engagement well-versed on the industry.
While in the field, our senior consultant quickly identified operating issues and deferred maintenance, and provided internal control recommendations. We also projected the cost to convert the facility to a K1 Speed-branded location. Our conclusions substantiated a lower valuation, and provided the CEO with the information he needed to negotiate with the seller.
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About Praesidian Capital
Praesidian Capital is an innovative private investment firm focused on providing senior and subordinated debt along with growth capital to private lower middle market businesses in the United States.
>> Praesidian's Website
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About Brandlin & Associates
Brandlin & Associates is an exclusive provider of accounting due diligence, financial consulting and strategic consulting services. We pride ourselves on offering superior technical expertise, years of practical experience and unparalleled service to decipher financial and operational performance metrics. As a result, our clients are able to make informed decisions in a timely manner. |
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"Brandlin & Associates' financial due diligence contributed to a successful transaction for our portfolio company, K1 Speed, Inc. Brandlin's senior-level consultants spoke with us daily while in the field, concisely reporting on their discoveries. Their work product, perspective and the evidence they gathered helped us determine a valuation that made sense for both buyer and seller."
Jon Mansfield, Partner, Praesidian Capital
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Join us for an engaging presentation by urban entrepreneur and founder of FUBU Clothing:
February 6, 2013
5:00 - 8:00 pm
The Jonathan Club
545 S. Figueroa Street
Los Angeles
We are pleased to be a Platinum Sponsor of the Commercial Finance Conference of California, the trade group for commercial finance companies, factors, banks and other financing agencies engaged in the asset-based financial services industry
of California.
>> Register here
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