In this episode, Nicholas Spezio joins us to talk about the importance of financial due diligence and the critical areas within integrating the acquired business post-close. Nicholas has experience in M&A as both buy-side and sell-side advisor, helping investors buy more than 40 businesses in the last two years and helping sellers exit or raise capital by performing financial due diligence at the transaction level. Nicholas spent seven years at PwC in their Asset & Wealth Management practice, auditing some of the world’s largest hedge funds and investment management companies, including Tiger Global, BlueMountain Capital Management, and Vanguard, as well as traveling the world to help train colleagues on digital transformation software, such as Alteryx and UiPath, in the new age of leveraging technology to facilitate audits and accounting. Nicholas and his group provide full lifecycle financial due diligence and integration support to some of the most active buyers in the lower middle market.
- What does Exbo Group do? [2:05]
- What’s the key to integration? [4:06]
- What’s a digital accelerator? [6:12]
- Can owners consolidate and streamline data before they sell their company? [10:31]
- What is NetSuite, and what role does it play in integration? [11:42]
- At what revenue marker does it make sense to consider moving to NetSuite? [13:22]
- How can financial diligence help with integration? [14:26]
- What types and sizes of companies does Exbo Group work with on diligence, and are they venture-backed? [18:03]
- What is a revenue waterfall? [19:53]
- Is it typical to find revenue errors during diligence, and how much can that throw off a valuation? [20:59]
- What is the objective of conducting financial due diligence? [22:46]
- Why is EBITDA widely used as a metric in valuation? [25:39]
- How much financial diligence is art versus science? [27:59]
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Acronyms or Terms Used in This Episode
- PwC: PricewaterhouseCoopers is the second-largest professional services network in the world and is considered one of the Big Four accounting firms.
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