Sell-Side Due Diligence

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We isolate sustainable EBITDA by adjusting for non-recurring income, related-party transactions, and aggressive revenue recognition. Our analysis reconciles GAAP/IFRS earnings with management-reported metrics and highlights accounting treatments affecting normalized cash flows and valuation credibility.

We evaluate timing, classification, and policy alignment of revenue recognition against ASC 606 / IFRS 15. Particular focus is placed on deferred revenues, gift card breakage, loyalty programs, and whether revenue cutoffs match contractual performance obligations.

We assess normalized net working capital (NWC) through seasonal benchmarking, variance analysis, and deviation from standard industry cycles. This informs closing adjustments and purchase price mechanisms in the SPA, minimizing post-deal disputes around AR, AP, and inventory.

We map the EBITDA-to-cash conversion trajectory, isolating leakage through capex, lease payments (IFRS 16/ASC 842), and working capital drag. This uncovers quality of cash flows, identifies covenant compliance risks, and tests sustainability of free cash flow.

We analyze lease portfolios under IFRS 16/ASC 842, recalculating lease liabilities, interest expense, and right-of-use asset amortization. This impacts EBITDA adjustments, debt-like items, and leverage ratios—critical for acquirer assessments of balance sheet health and financial covenants.

We reclassify expenses across direct costs, SG&A, and discretionary items. This includes re-basing cost centers, unbundling founder salaries, and allocating central services—providing acquirers with a clear margin profile by concept, unit, or brand.

We identify contingent liabilities, embedded derivatives, management guarantees, or unrecorded accruals (e.g., pending litigation, regulatory fines, or vendor disputes). This forensic review ensures acquirers have visibility into financial obligations not captured in statutory reports.

We trace related-party flows including rent, management fees, intra-group loans, and procurement arrangements. These are normalized or carved out, with clear audit trails, to reflect standalone performance and remove distortions from family office or founder-led group structures.

We perform longitudinal analysis of revenue, gross margin, and EBITDA by channel, geography, or brand—highlighting anomalies, concentration risks, and macro-driven volatility. This forms the analytical foundation for forward-looking investor models and scenario-based valuations.