Search Fund Advisory Services

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After the laborious process of finding the right deal, the signing of an LOI leads to a new set of obstacles for search entrepreneurs. Often, these obstacles can shift a search entrepreneur’s focus away from getting the deal closed. Typical examples of these ‘deal breakers’ include:

  • Inaccurate financial statements
  • Failure to track KPIs
  • Recent changes in industry and the market
  • Failure to attract financing
  • Incomplete financial modeling

Intrinsic, through our Search Fund Advisory Services team, assists search entrepreneurs with essential tasks so they can make more informed and efficient decisions in the deal making process. Intrinsic provides business valuation, machinery & equipment valuation, quality of earnings analysis, investment and operations modeling, and underwriting model development services to improve the probability of a successful acquisition.


Due Diligence & Quality of Earnings

Our Due Diligence and Quality of Earnings practices provide timely and critical intelligence in evaluating the upside and financial risks to a proposed transaction. This process evaluates quality of earnings and value drivers while also identifying high risk areas, hidden liabilities, and potential ‘deal breakers’. 

We perform rigorous analysis of financial statements, audit work papers, and other financial and transaction data to gain an in-depth understanding of a target company’s business in relation to your needs. Our due diligence process also includes management interviews and, when necessary and desirable, site visits to evaluate true financial conditions and key performance indicators.

Our quality of earnings analysis includes matters such as:

  • Revenue sources and concentrations        
  • Working capital components, trends, and seasonality
  • Adjustments to EBITDA                          
  • Accrued liability recognition
  • Asset quality and reserve adequacy
  • Debt exposure

Machinery & Equipment and Business Valuation

Our Machinery & Equipment and Business Valuation practices provide expert and reliable valuations for various purposes. Intrinsic offers expertise for industries such as healthcare, oil & gas, mining, restaurants, manufacturing, retail, distribution, and more. Whether the purpose is for underwriting, insurance, or a transaction process, our experts provide unique insights and credible reports i n an efficient manner. Our services include:

Machinery & Equipment Business Valuation 
  • Purchase price allocations
  • Purchase price allocations
  • Onsite physical inspections
  • Stock compensation / 409a valuations
  • ‘Desktop’ valuations
  • Financial opinions / solvency analysis
  • Lease accounting valuations
  • Portfolio valuations / ASC 820
  • Fair market value
  • Contingent liability
  • Leaseback valuations
  • Intangible asset valuations
  • Loan collateralization and support
  • Goodwill impairment testing
  • Insurance confirmation
  • Employee Share Ownership Plans (ESOP)

Operations & Modeling Services Overview

The Operations & Business Modeling segment of Intrinsic’s Search Fund Advisory Services practice enables entrepreneurs to partner on mission critical decisions with experienced professionals. Intrinsic helps to mitigate potential ‘deal breakers’ prior to closing, arms search entrepreneurs with the necessary tools to effectively negotiate through the sale process, provide robust models to ID risk with a focus on priority, and strengthen your team’s capabilities through avoiding costly and dilutive additions. 

Intrinsic’s services include:

Operating Model Development

  • KPI Identification and Tracking
  • Variance Analysis
  • Integration of Quality of Earnings diligence
  • Stress Testing
  • Solvency Analysis

Investment and Underwriting Model Development

  • LBO Analysis
  • Covenant Testing
  • Financing Scenario testing
  • Lender presentation
  • Exit planning