According to Deloitte, “Corporations and private equity firms pin the most blame on external factors, but recognize the need for more effective due diligence and integration to make sure revenue projections materialize.”
When purchasing a company, do you complete an inventory of locations, services, and contracts?
An Aviation Service company purchased a group of locations at various airports throughout the United States. RadiusPoint recommended an inventory of the services that were included in the purchases, but the management team declined. Throughout the process, the transition was problematic for the accounts payable team and the timeline was extended well beyond the allotted timeframe.
Issues that occurred:
- Accounts and services were on the sellers’ corporate accounts and could not be moved without proper documentation from the seller
- Identified multiple invoices not a part of the sale BEFORE they were transitioned to buyer
- Services were terminated due to the buyer’s transition team moving too slowly
- Did not renegotiate contracts for an increase in spending
The Buyer lost money by not having an inventory to identify that the services actually did belong to their purchase. A year after the transition, RadiusPoint identified locations and invoices moved over that were not a part of the deal.
Over $15,000.00 lost because services were paid for a location that was not a part of the purchase.
Dexter provides a full-service acquisition service which includes pre-due diligence, due diligence, integration, and post-transition efforts to ensure that the purchase meets or exceeds the earning and profitability expectations and transitions are completed seamlessly.
Partnered with RadiusPoint, Dexter hands off the Accounts Payable tasks during the integration phase to ensure business continuity with all of the invoices that your newly purchased company brings to your organization. RadiusPoint can provide:
- Costs benchmarked and brought under control to stop the overspending
- Plans to move from some of the higher cost space to lower-cost space
- Restructuring of the logistics and eliminating redundant warehouse space
- Processes to better define procurement to cut costs
Having Dexter and RadiusPoint on your Mergers and Acquisition team will save your team time, allow your acquisitions to move faster and transition move seamlessly.