M&A Insights
My name is Madhur Duggar and I work in the M&A space for the Software and IT Service companies and this is my podcast series M&A Insights. If you are interested in having a conversation around the strategic direction of your firm, are looking to grow your book and want some marketing and business development help or are an investor looking to make an acquisition in this space, write to me at podcastwithmadhur@gmail.com or reach out to me on Linkedin at www.linkedin.com/in/madhur-duggar.
M&A Insights
What Every MSP Should Know About Financial Due Diligence Before Going to Market
Madhur@excendio.com | 212.731.4230 | Book an Appointment Here (34) Madhur Duggar | LinkedIn
I sit down with Dan Brumwell Partner in Weaver’s Transaction Advisory Group to discuss Financial Due Diligence, a key component of the due diligence process.
Below are the questions discussed, along with a high level summary of the answer. Enjoy!
1. Weaver Background
2. Quality of Earnings (QoE): The Basics
Q: What is a QoE and why is it important?
Q: What are core components of a QoE?
Q: How is revenue broken down (monthly vs. annual)?
Q: What if data isn’t easily available?
Q: Can QoE show profitability per customer?
3. Audited Financials vs. QoE
Q: How is a QoE different from audited financials?
4. Common Adjustments in MSP QoEs
Q: What adjustments do you typically make?
5. Key Metrics and Red Flags
Q: What financial red flags do you often find?
Q: How do you handle churn metrics?
6. Net Working Capital (NWC) Essentials
Q: What is NWC and why is it important?
Q: How is NWC calculated?
Q: Common seller misunderstandings?
7. Process & Client Communication
Q: What does a typical engagement look like?
Q: Who participates in diligence calls?
Q: What if info is hard to get?
Q: How do you handle tight deadlines?
8. Seller-Side QoE: Why It Matters
Q: Why should a seller do a QoE report?
Q: When should MSPs do this?
9. Market Trends & Future of Diligence
Q: What trends are you seeing?
Q: Will QoE become fully automated?
10. Final Tips
Q: What’s your advice for MSPs thinking of selling?
🎧 Tune in now to learn how to own your financial due diligence process.
Madhur Duggar is a Senior M&A Advisor at Excendio Advisors and focuses on IT Services
Reach out to Madhur at Madhur@excendio.com or 212.731.4230
Book an Appointment with him on his LinkedIn at (34) Madhur Duggar | LinkedIn
Check out Excendio Advisors and our amazing content at www.excendio.com
Reach out to Dan Brumwell on his LinkedIn at (30) Dan Brumwell, CPA | LinkedIn
www.linkedin.com/in/madhur-duggar