{"id":747,"date":"2024-04-15T10:34:33","date_gmt":"2024-04-15T10:34:33","guid":{"rendered":"https:\/\/kardiaadvisory.com.au\/?p=747"},"modified":"2024-04-16T06:56:18","modified_gmt":"2024-04-16T06:56:18","slug":"series-part-2-mind-the-gap","status":"publish","type":"post","link":"https:\/\/kardiaadvisory.com.au\/2024\/04\/15\/series-part-2-mind-the-gap\/","title":{"rendered":"Series Part 2: Mind the Gap"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"747\" class=\"elementor elementor-747\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-604b1265 e-flex e-con-boxed e-con e-parent\" data-id=\"604b1265\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-23f19024 elementor-widget elementor-widget-theme-post-featured-image elementor-widget-image\" data-id=\"23f19024\" data-element_type=\"widget\" data-widget_type=\"theme-post-featured-image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"2000\" height=\"1387\" src=\"https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapTrain.jpg\" class=\"attachment-full size-full wp-image-919\" alt=\"\" srcset=\"https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapTrain.jpg 2000w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapTrain-300x208.jpg 300w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapTrain-1024x710.jpg 1024w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapTrain-768x533.jpg 768w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapTrain-1536x1065.jpg 1536w\" sizes=\"(max-width: 2000px) 100vw, 2000px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7904fd14 elementor-widget elementor-widget-text-editor\" data-id=\"7904fd14\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>In any M&amp;A transaction, there is often a knowledge gap between teams and advisors that can lead to lost value and acceptance of unknown risks. For instance:<\/p><ul><li>The valuation team may be unaware of the nuances of the purchase price adjustment mechanism in the sale &amp; purchase agreement (SPA) and miss critical adjustments in the valuation model.<\/li><li>\u00a0The legal team might not fully grasp how the valuation is derived and include purchase price adjustments in the SPA which do not align to the valuation model.<\/li><li>Crucial issues flagged by financial due diligence may make their way to client lists but not into the SPA, as a price adjustment or warranty and indemnity matter.<\/li><li>Tax considerations could be raised by tax advisors, yet material items overlooked in the tax indemnity or debt definition.<br \/><br \/><\/li><\/ul><p>Even when teams are connected, differences in technical language can cause confusion, especially when deadlines loom large. The closer teams get to the end of the transaction, the greater the tendency to \u2018get the deal done\u2019 rather than \u2018get the deal done right\u2019.\u00a0\u00a0<\/p><p>It is in the gap of responsibility and knowledge that significant value can be lost. Our founder, Sarah Grant, recalls a 15-minute conversation with a client, where she identified a double count of a c.$500m purchase price adjustment in an SPA. The key issue being the valuation model and purchase price adjustments in the SPA didn\u2019t align. This oversight, present for six months, went unnoticed by the myriad of advisors and client teams working on this significant transaction, due to a gap in knowledge between the legal and financial teams and a gap in specialised experience of where to look for issues.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7c8b4d25 elementor-widget elementor-widget-image\" data-id=\"7c8b4d25\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"2000\" height=\"1387\" src=\"https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapBridgen.jpg\" class=\"attachment-full size-full wp-image-918\" alt=\"\" srcset=\"https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapBridgen.jpg 2000w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapBridgen-300x208.jpg 300w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapBridgen-1024x710.jpg 1024w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapBridgen-768x533.jpg 768w, https:\/\/kardiaadvisory.com.au\/wp-content\/uploads\/2024\/03\/Mind-The-GapBridgen-1536x1065.jpg 1536w\" sizes=\"(max-width: 2000px) 100vw, 2000px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5d1161a9 elementor-widget elementor-widget-text-editor\" data-id=\"5d1161a9\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The Kardia Solution: Bridge the Gap<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1819160c elementor-widget elementor-widget-text-editor\" data-id=\"1819160c\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>We specialise in creating a bridge between legal and financial teams on transactions. Our SPA specialists speak both the &#8216;legal&#8217; and &#8216;financial&#8217; M&amp;A languages, possessing the expertise necessary to ask the right questions to identify the value gaps. Not stopping there, we then assist you to find a contractual solution to the issue. Just as Sarah did in identifying a c.$500m double count from a short conversation, we thoroughly test the adjustments between enterprise value and equity value to ensure alignment with valuation, due diligence findings and specific commercial arrangements.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6c1bb3e2 elementor-widget elementor-widget-post-navigation\" data-id=\"6c1bb3e2\" data-element_type=\"widget\" data-widget_type=\"post-navigation.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-post-navigation\">\n\t\t\t<div class=\"elementor-post-navigation__prev elementor-post-navigation__link\">\n\t\t\t\t<a href=\"https:\/\/kardiaadvisory.com.au\/2024\/03\/20\/mastering-completion-accounts-kardias-proven-game-plan-for-success\/\" rel=\"prev\"><span class=\"elementor-post-navigation__link__prev\"><span 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knowledge gap between teams and advisors that can lead to lost value and acceptance of unknown risks. For instance: The valuation team may be unaware of the nuances of the purchase price adjustment mechanism in the sale &amp; purchase agreement (SPA) and miss critical adjustments in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":919,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-747","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-completion-accounts"],"_links":{"self":[{"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/posts\/747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/comments?post=747"}],"version-history":[{"count":30,"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/posts\/747\/revisions"}],"predecessor-version":[{"id":1080,"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/posts\/747\/revisions\/1080"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/media\/919"}],"wp:attachment":[{"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/media?parent=747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/categories?post=747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kardiaadvisory.com.au\/wp-json\/wp\/v2\/tags?post=747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}