Supporting a Successful Acquisition Through Financial Advisory and M&A Readiness

Industry: Healthcare Services 

Solution: Financial Advisory and M&A Readiness Services covering consolidated financial reporting, financial due diligence support, financial analysis, internal controls enhancement, accounting clean-up and cloud accounting implementation

Results: Improved reporting accuracy, strengthened governance, enhanced transaction readiness and successful support throughout the acquisition process

Challenge

A leading medical imaging services group in Hong Kong with more than a decade of operations, was preparing for an acquisition by a prospective buyer. 

Although the business had established a strong market presence, it had limited experience in mergers and acquisitions and was not equipped to produce the consolidated financial information required within the transaction timeline.

The acquisition required the preparation of annual and quarterly consolidated financial reports covering an 18-month period, together with supporting schedules for financial due diligence. Existing accounting records, however, were maintained primarily on an annual basis,  making it difficult to produce accurate interim financial information.

 Additional challenges included:

• Limited experience with M&A processes and financial analysis 
• Tight reporting deadlines for 18 –months of consolidated financial information  
• Weak internal controls resulting from limited periodic financial reviews 
• Lack of integration between the Clinic Management System (CMS) and the accounting system, resulting in reconciliation and timing differences 
• Conversion from cash basis to accrual basis accounting to meet buyer and reporting requirements 
  Without addressing these issues, the Group faced potential delays to the transaction process, increased due diligence risks and reduced stakeholder confidence.

Solution

Our team acted as the Group's internal financial advisor throughout the acquisition process, providing strategic guidance and hands-on support to improve financial transparency, strengthen reporting quality and facilitate a successful transaction.

Stage 1: Financial Reporting Preparation 

• Accounting clean-up and bookkeeping support
• Conversion from cash basic to accrual basis accounting
• Preparation of consolidated financial statements
• EBITDA, cash flow and financial variance analysis

Stage 2: Transaction & Due Diligence Support

To support the acquisition process, we:

• Assisted with financial due diligence
• Coordinated with the buyer and professional advisors 
• Prepared supporting financial analyses and variance explanations

Supported negotiations by providing timely financial information 

Stage 3: Finance Transformation & Internal Controls

To strengthen the finance function, we:

• Restructured the chart of accounts 
• Implemented a cloud accounting solution 
• Conducted knowledge transfer and finance team training

Results

Through our financial advisory and M&A support services, the Group achieved:

• Improved financial reporting accuracy and reliability 
• Timely delivery of acquisition-ready financial information 
• Enhanced financial visibility through real-time reporting 
• Improved compliance with Hong Kong accounting standards 
• Greater transaction readiness and smoother financial due diligence 
• Better strategic decision-making through timely and reliable financial insights