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top-down financial analyses of potential
targets, often evaluating various deals
simultaneously. Their well-rehearsed
and refined analysis of potential
distressed targets allows them to quickly
evaluate opportunities and determine if
the target meets their investment criteria.
When this initial analysis yields a green
light decision to commit further time and
resources to the potential transaction,
distressed investors can benefit
significantly from engaging restructuring
advisors to conduct a thorough, bottom-up diligence of the distressed target.
In the distressed acquisition context,
a restructuring advisor’s mandate
typically involves conducting:
• Detailed analyses of the target’s
operations while identifying areas
of risk and opportunity. This
involves examining the existing
or potential impact of these issues
on the target’s business operations
and overall enterprise value.
• A granular financial review of
the target to diagnose the true
state of its financial health to
ensure that the financial position
represented by the target in fact
reflects its current situation.