R95M
Liabilities Found
23%
Purchase Savings
R620M
Deal Value
4 Months
Duration
Anonymised under strict NDA — no client identities disclosed
The Challenge
A South African manufacturing conglomerate was pursuing the acquisition of a Mozambican manufacturing operation valued at approximately R620M. The target company had complex cross-border financial structures, multiple related-party transactions, and limited audited financial history. The acquirer needed rigorous independent due diligence to validate the investment thesis and determine a fair purchase price.
Our Approach
Deployed a specialist financial due diligence team to the target's operations in Mozambique
Conducted a comprehensive review of five years of financial records, contracts, and tax filings
Performed an independent business valuation using DCF, comparable transactions, and asset-based methodologies
Identified and quantified all contingent liabilities, related-party transactions, and off-balance-sheet items
Prepared a detailed due diligence report with risk-adjusted valuation recommendations
The Solution
SAAC's financial advisory team conducted an exhaustive due diligence process that uncovered R95M in previously undisclosed liabilities including contingent tax obligations, unrecorded environmental remediation costs, and unfavourable long-term supply contracts. The independent valuation, conducted using three complementary methodologies, determined that the target was overvalued by approximately 23%. These findings were used to renegotiate the purchase price, ultimately saving the acquirer R143M.
Key Outcomes
R95M in previously undisclosed liabilities identified and quantified
Purchase price renegotiated downward by 23%, saving R143M
Comprehensive risk register developed for post-acquisition integration
Independent valuation accepted by both parties as the basis for final pricing
Deal successfully closed with appropriate warranty and indemnity protections
Post-acquisition integration plan developed to address identified risks
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