Business case

Vendor assistance in the oil and gas market

Context

The shareholders in a company decided to sell up as the company’s activities were no longer core to their businesses and required significant investment to remain competitive. The company, set up as a joint venture (JV), sold products used to transfer personnel from vessel to offshore oil and gas installations, providing a safe and cost-effective alternative to helicopters, crew boats and jack-ups. We were engaged to provide vendor assistance.

Key Takeaway

Our analysis required consolidating all projects, an exercise that the client had never performed. It gave potential investors a realistic view of the company’s profit-generating ability and any potential upsides and vulnerabilities. Our focused approach enabled the seller to strike an agreement with a buyer. The sale was originally intended to be a share deal, but considering the number of large pending claims, the final buyer opted for an asset deal.

Accuracy Role

Since being founded, the company had only broken even once. We therefore had to design a way to present financials that would attract investors and decided that a presentation by cash-generating unit was the best option. There were various challenges as the level of financial information was poor: the finance department’s knowledge was limited and the accounting system had recently changed. We delved into the financial system to understand what information was available and how it could be used to prepare an analysis by operating unit. In addition, Management had difficulty in realistically forecasting the business. Further obstacles included poor current trading performance, a lack of pipeline, the valuation of tangible assets and outstanding claims, all of which had to be addressed individually. With our historical insight developed during the project, we were able to assist Management in preparing their forecasts for the business.

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