Insight

Savvy shoppers: How buyers find value in adjustments

In M&A deals, buyers are learning how to use data and proprietary technology to challenge proposed seller adjustments.

Dan Tiemann

Dan Tiemann

Partner, Deal Advisory and Strategy, KPMG LLP

Joe Hartman

Joe Hartman

National Co-Leader Private Equity Trans. Svs., KPMG US

+1 312-665-2489

Jason Balon

Jason Balon

Principal, Deal Advisory, KPMG US

+1 312-665-1476

Marc Craig

Marc Craig

Director, Advisory, KPMG US

+1 312-665-3203

As buyers become more skilled with advanced analytics, their pushback against seller adjustments in quality of earnings report is getting more rigorous. Buyers routinely exclude seller adjustments, but with adjustments proliferating the stakes are higher. Buyers should dig into the proposed adjustments and examine the methodology used to derive them as part of the overall diligence effort.

A new KPMG report, Savvy shoppers: How buyers find value in adjustments, explores in detail the impact of these seller-proposed EBITDA adjustments from the buyer’s perspective. We look at the nature and magnitude of the adjustments that buyers most often challenge and identify where buyers frequently discover sources of value and identify their own adjustments.