Industry knowledge Flashcards
What is the sell side of a transaction?
This is when a vendor (a company looking to sell a stake/equity in their company) is assisted by an investment bank and a financial advisor to make the sale.
What is the buy side of a transaction?
This is when a buyer (a PE firm, competitor or other stakeholder) is assisted by a financial advisor to do due diligence on the work being done by the sell side’s IB and FA team to ensure a good deal and good price is reached.
What is the main deliverable of FA firms in TAS (transaction advisory services)?
The DD report
Both buy side and sell side FA firms need to deliver this
What is a VDD?
The VDD (Vendor Due Diligence) is done by the sell side FA firms. It dissects the company that the FA firm is selling in a transparent way to give a credible overview to the buyer.
It is a key prerequisite for any sale of a company.
It’s not about touching up the figures to make them look prettier.
What is a buyer’s FDD?
The Financial DD is run by the buy side FA firm and reviews the VDD.
It validates the company being sold’s financials, risks and strategic fit from the buyer’s perspective.
They flag potential adjustments and opportunities for the buyer to get a better deal
