The headline price hides the cash requirement
Fees, completion adjustments, operating cash and integration costs need to be reflected consistently in the funding plan.
Consult EFC · UK businesses · Sector agnostic
Build a clear view of purchase funding, cash needs, downside scenarios and finance integration, before and after acquiring a business.
When the current process needs more
An acquisition model should explain more than the purchase price. It needs to show how the transaction is funded, what cash the business needs to operate, which assumptions support debt service and what happens if integration costs more or trading falls behind plan.
Consult EFC connects the transaction assumptions to an operating forecast and an agreed finance integration plan. We can support a first-time buyer, management buyout team, established SME acquirer or investor, with the scope tailored to the target and your existing advisers.
Fees, completion adjustments, operating cash and integration costs need to be reflected consistently in the funding plan.
The team needs to see the effect of lower trading, slower collections, cost overruns or later benefits.
Reporting, opening balances, cash control and finance responsibilities need to work from the first post-completion period.
Agree the outputs before the work
A transparent view of the agreed purchase consideration, transaction cash costs, funding sources and other items included in the brief, with timing and assumptions shown.
A model linking the required revenue, costs, working capital, capital expenditure and financing schedules to the financial statements and outputs agreed.
Scheduled repayments, interest and selected covenant calculations where included, using the definitions and terms supplied. No assumption that funding is approved.
Separate assumptions for trading, collections, integration costs and benefits, with clear timing and dependencies.
A defined workstream for reporting, close responsibilities, cash visibility, systems handovers and opening-balance information.
Model checks, assumption notes, update instructions and a walkthrough, plus an agreed process for monitoring performance after completion.
Make the work visible
Fictional example only. These figures are not an offer of finance, a client transaction or a recommended capital structure.
The operating example shows why a balanced completion funding schedule does not establish that the first year is fully funded. Additional debt repayment, cash acquired, tax and completion adjustments must be assessed where relevant, with no double counting.
Clear work. Clear responsibilities.
Start by defining the transaction perimeter, completion assumptions and intended users of the model. A share acquisition, asset purchase, carve-out and management buyout can create different modelling and integration requirements. Use the agreed deal structure and adviser input rather than a generic acquisition template.
Test funding uses, operating assumptions and the downside cases that could change the buyer’s decision or the amount of cash required.
Coordinate the information needed for opening balances, cash control, reporting responsibilities and the agreed post-completion finance process.
Compare actual trading and integration cash costs to the plan, explain deviations and update management’s view of headroom and priorities.
Financial due diligence investigates the evidence behind the target’s performance and risks. Modelling uses specified evidence and assumptions to explore outcomes. One does not automatically replace the other. ICAEW’s financial due diligence guidance explains the role of FDD in informed transaction decisions.
We can incorporate agreed findings from your advisers, distinguish supported adjustments from buyer assumptions and keep integration benefits separate from costs. A benefit should have an owner, timing and dependency rather than appear as an unsupported balancing figure.
The service is financial modelling and finance-workstream support. Legal structuring, tax advice, specialist accounting, regulated investment advice and arranging finance are separate unless appropriately authorised and expressly included. Management makes the acquisition and operating decisions.
Built around the way you operate
The service is sector agnostic. The examples below show how a brief can be tailored; acceptance and any specialist input depend on your business, reporting requirements and complexity.
Model fee-earner capacity, customer retention, project margins, owner replacement costs and finance reporting handovers.
From initial brief to useful outputs
Identify the target, deal stage, proposed terms, users, funding assumptions and required outputs.
Review the information supplied, incorporate agreed adviser findings and document gaps and assumptions.
Construct the financial links, test scenarios and review cash, funding and integration dependencies with the team.
Deliver the agreed model and finance plan, establish update responsibilities and scope post-completion support.
A useful first conversation
Start with the proposed transaction, target size and sector, current financial records, available due diligence, consideration structure, financing terms or proposals, management forecast and completion timetable. Describe what your internal team and advisers already cover.
For integration support, identify entities, accounting systems, bank accounts, reporting calendars, finance staff and the information needed for the opening position. Systems migration, technical accounting for the acquisition, statutory consolidation and valuation work require separately defined responsibilities where needed.
Fees depend on the model scope, data readiness, structure, scenarios, review process, timing and integration involvement. We agree the editable deliverable, permitted use, documentation and any continuing updates before work starts.
Your questions, answered
It connects the specified transaction and financing assumptions to the target’s operating forecast, cash requirements and agreed outputs. It can help management assess funding needs, debt service and downside scenarios.
No. Due diligence investigates financial evidence and risks within an agreed scope. Modelling explores outcomes using defined evidence and assumptions. The workstreams can inform each other but serve different purposes.
We can discuss either, subject to the target, structure, information and required outputs. The model should fit the actual transaction rather than assume the same financing or integration needs for every deal.
No. It can support preparation and explain assumptions, but funding depends on the lender or investor’s assessment, terms and approvals. Forecast receipts should not assume an unapproved facility is available.
Yes, where agreed. Costs and benefits should have separate assumptions, timing, owners and dependencies, so management can assess delays, overruns and the evidence supporting expected benefits.
The agreed workstream can cover reporting, cash visibility, close responsibilities, information handovers and the opening-balance process. Systems migration, specialist accounting or other work is included only if expressly scoped.
Selected covenant calculations can be included using the actual definitions and terms supplied. The engagement must identify who confirms those terms and how the calculations will be reviewed and used.
The proposal specifies the model or other deliverables, editable format, permitted use, assumptions, checks, documentation, walkthrough and update responsibilities. Ongoing support is agreed separately.
Tell us the acquisition stage, target business and the decisions your model needs to support.
Please describe the requirement in your enquiry. Confidential records can follow through an agreed sharing process.