A buyer makes two different decisions in an acquisition, and they need two different pieces of work. Before the letter of intent the question is whether to pursue the deal at all and what to put in the offer, and that answer has to arrive in days. After the letter of intent, under exclusivity, the question is whether what you were told is true and what it changes about the price and the terms. The work follows the stage of the deal, with a fixed fee and scope agreed before it begins.
Buy-side due diligence is priced by the enterprise value of the target and how far the work goes. A pre-LOI review is the fast triage that decides whether to pursue and what to offer. Confirmatory diligence is the post-LOI engagement, and it includes the quality of earnings work. The full buy-side package adds the transaction model, the returns, the lender package and the first ninety days of post-close reporting. The fee and scope are agreed before work begins.
You have a business in front of you and a seller asking for an offer, and you need to know whether to bid and at what number before you commit to exclusivity.
You are under a letter of intent with the clock running and the confirmatory work has to be done properly.
The seller has produced its own quality of earnings report and you need to know what in it stands up before you accept the number it concludes with.
You are buying with debt or presenting to an investment committee and the model, the coverage and the downside cases have to hold up to somebody else's review.
These two moments get confused with each other constantly, and the cost of confusing them runs in both directions.
You are deciding whether this deal is worth pursuing and what the offer should say, working from whatever the seller has sent and a call with the owner. Full diligence here is the wrong spend, because you may not win the deal and you have no exclusivity to protect the money. What you need is enough work to avoid a bad fit and shape a sensible offer, which means tying sales to deposits for a sample period, confirming the add-backs and the owner's compensation, reading the revenue trend and the customer concentration, and sampling the agings. That takes days.
You now have exclusivity, a deadline and a reason to spend properly, because every finding from here converts into price, structure or a representation in the agreement. This is where the earnings number gets built and supported, the working capital peg gets set, the contracts get read one at a time and the concentration gets quantified. Underspending here is the expensive mistake, since an issue you fail to find is an issue you buy.
Buying a business is a sequence of decisions made on incomplete information against a deadline, and diligence exists to move as much of that information as possible onto the side of the line where it can still change what you do.
Two things go wrong. The first is underspending before exclusivity, which means committing to a deal on a seller's summary and discovering in week four what a week of work would have shown before the offer went in. The second is spending properly after exclusivity and then failing to convert any of it, which happens when requests go out piecemeal as each adviser thinks of them, the seller receives the same question three times and starts answering none of them properly, nobody tracks which items came back complete as against which came back with something attached, and two weeks before signing the open list is still long enough that the remaining items get waived rather than resolved.
What comes out of the confirmatory engagement is the earnings number with the support beneath it, the commercial picture around it, and a findings memo that ends in conclusions. Adjusted EBITDA is built and tied to document, page and amount. The working capital peg comes out of a monthly build. Revenue gets split by type, concentration gets quantified against the credit quality of the customers behind it, and the contracts underneath that revenue get read for pricing mechanism, term, renewal and change of control. Capital expenditure gets split between maintenance and growth with the basis shown, because that split decides what the business actually costs to run.
The process runs with one owner throughout. The request list goes out once, mapped across every workstream and consolidated with your lawyers' and accountants' lists so the seller is asked for each item a single time. Everything arriving is scored for completeness. Every week you get the outstanding items, the items at risk, the decisions waiting on you and the critical path to signing.
A finding that stays in a report does nothing, so each one is written to be used. Every issue in the findings memo carries the same five fields, because those are what a negotiation actually needs.
Fixed fees depend on the target's enterprise value and the depth of diligence required.
| Engagement | Under $2M EV | $2M to $10M EV | $10M to $50M EV |
|---|---|---|---|
| Pre-LOI Review | $1,750 | $2,950 | $3,950 |
| Confirmatory Diligence | $3,950 | $5,950 | $7,950 |
| Full Buy-Side Package | $7,999 | $9,999 | $12,999 |
Targets above fifty million in enterprise value are scoped individually. The fee for a pre-LOI review is credited in full against a confirmatory engagement started within ninety days, whether or not it is on the same deal.
From $1,750
This is the fast read that tells you whether to bid and at what number.
From $3,950
This is the engagement for exclusivity, and it includes the earnings work.
From $7,999
We carry the whole engagement through the model and into the first ninety days.
Pre-LOI Review fits the point where a business is in front of you and an offer is expected, so the work has to be fast and has to end in a decision. It comes back as a pursue or decline conclusion with an indicative value range and the deal breakers stated plainly. You also get the data request list, the contingencies and the working capital approach to put into the letter of intent.
Confirmatory Diligence is the main engagement, and it starts once you have exclusivity. The earnings work is included at report standard, covering adjusted EBITDA built and supported, the working capital peg, the cash to accrual bridge, capital expenditure normalization and net debt. The commercial work sits alongside it on revenue quality, customer and supplier concentration, the contracts and the people. It ends in the findings memo.
Full Buy-Side Package is for a deal carrying debt or an investment committee. It adds the monthly transaction model with the debt schedule, the cash sweep and the covenant tests, and the returns with a bridge showing where they come from. Downside cases run to the point a covenant breaks, and the synergies are sized and phased against the cost of achieving them. Where there is debt it builds the lender package, and it stands up the first ninety days of post-close reporting so the business is being measured from the week you own it.
| Deliverable | Component | Detail |
|---|---|---|
| Pre-LOI memo | Conclusion | A pursue or decline conclusion with the reasoning, delivered in days |
| Pre-LOI memo | Value range | An indicative range with the basis for it and the multiple applied shown |
| Pre-LOI memo | What the LOI should say | The data request list, the contingencies to include, the exclusivity period needed and the working capital approach to state |
| Pre-LOI memo | Deal breakers | Anything found that would stop the deal, stated plainly with its effect sized |
| Earnings check | Deposits tie | Reported sales tied to bank deposits for a sample period |
| Earnings check | Add-backs and owner compensation | Proposed add-backs and owner compensation confirmed against the support that exists today |
| Revenue read | Monthly trend | Monthly revenue across the period with the trend and any pattern around period ends |
| Revenue read | Customer concentration | Revenue share of the largest customers with tenure, stated as a percentage |
| Working capital read | Agings and terms | Receivables and payables agings sampled, with the working capital terms stated |
| Operating read | Lease, headcount and key people | Lease terms, headcount by function and where the key-person exposure sits |
| Deliverable | Component | Detail |
|---|---|---|
| Earnings work, report standard | Normalization bridge | Reported through to adjusted EBITDA with every adjustment supported to document, page and amount |
| Earnings work, report standard | Adjustment categories | Company, normalizing and pro-forma adjustments kept apart |
| Earnings work, report standard | Net working capital peg | Working capital built by month on a reported and an adjusted basis with a peg range out of it |
| Earnings work, report standard | Cash to accrual bridge | The bridge where records are kept on a cash basis, with the effect on each period shown |
| Earnings work, report standard | Capital expenditure normalization | Maintenance against growth capital expenditure with the basis for the split shown |
| Earnings work, report standard | Net debt and debt-like items | Debt, leases, deferred revenue, accrued owner items and earnouts scheduled |
| Commercial analysis | Revenue quality | Recurring, contracted, project-based and one-time revenue split out with the trend in that split |
| Commercial analysis | Customer concentration | Revenue and margin by customer, tenure, retention, churn and the effect of losing the largest names |
| Commercial analysis | Contract review | Contract by contract terms, pricing mechanism, term, renewal, termination and change of control |
| Commercial analysis | Backlog | Backlog by customer and by expected period with the conversion history behind it |
| Commercial analysis | Supplier concentration | Supplier dependency, terms, single-source exposure and switching cost |
| People analysis | Headcount and compensation | Headcount by function, compensation, turnover and retention risk in the roles that matter |
| Process spine | Single request list | One list mapped across financial, tax, legal, commercial, operational, human resources, information technology, insurance and environmental, consolidated with the other providers so the seller is asked once |
| Process spine | Document tracker | Owner, status, date requested, date received, completeness score and follow-up date |
| Process spine | Completeness scoring | Each item scored so partial responses stay visible |
| Process spine | Question log | Question, workstream, owner, date raised, answer, source document and status |
| Process spine | Provider coordination | Scheduling and information flow across legal, tax, insurance and appraisal providers |
| Process spine | Weekly critical path report | Items outstanding, items at risk, decisions needed and the critical path to signing |
| Findings memo | Findings | Every issue quantified, with the calculation in the file |
| Findings memo | Issues list | Issue, financial effect, probability, mitigation and the item it drives in the agreement |
| Deliverable | Component | Detail |
|---|---|---|
| Everything in Confirmatory Diligence | All items above | Carried in full |
| Excel transaction model | Model structure | A monthly model with separate company and scenario input sheets and a balance check |
| Excel transaction model | Sources and uses | Funding at close with fees, rollover, seller note and equity shown separately |
| Excel transaction model | Debt schedule | Each tranche on its own schedule with fees, amortization, cash sweep and revolver mechanics |
| Excel transaction model | Covenant tests | Leverage, coverage and fixed charge tests by period with headroom |
| Excel transaction model | Cash flow and coverage | Cash available for debt service with coverage by period |
| Excel transaction model | Returns | Internal rate of return, multiple of invested capital and a bridge showing how much comes from growth, margin, debt paydown and multiple |
| Excel transaction model | Downside and stress cases | Cases run to the point a covenant breaks, stated as a percentage decline in revenue |
| Excel synergy file | Synergy quantification | Each synergy sized, phased by month and netted against the cost to achieve it |
| Lender package | Package where there is debt | The borrower package, coverage schedules and the memorandum the lender needs to underwrite |
| Integration finance plan | Plan | The finance workstream for the first ninety days with owners, dates and dependencies |
| Post-close reporting | Reporting stood up | Opening balance sheet, first close, reporting pack and the covenant calculation live through the first ninety days |
The engagement starts from the letter of intent and the draft purchase agreement where those exist, because the exclusivity period, the conditions and the indemnity structure all determine what the work has to produce and by when.
The full request list goes out once, mapped across every workstream and consolidated with the other providers' lists so the seller is asked for each item a single time, with the period and the format stated against each request.
Everything arriving is logged and scored for completeness, questions go into a single log with the source recorded against each answer, and you receive a weekly report covering what is outstanding, what is at risk and what needs a decision from you.
The earnings number gets built and supported while the commercial, contract, people and capital expenditure work runs alongside it, and anything material gets raised with you as it is found.
A partner reviews the file before anything is released, and the tie-outs get run first, which means the schedules against the trial balance, the analysis against the source records and every figure in the memo back to the file that produced it.
You receive the memo, the analysis file and the model where the engagement includes one, together with a walkthrough call, and on the full package the work continues through the negotiation and into the first ninety days after close.
The engagement starts by reading that report against the support underneath it rather than rebuilding the number from the ledger, which is faster and cheaper, and it comes back with a challenge list setting out what would be required before each adjustment is accepted. A seller's report is a position rather than a finding, and it is usually the cheapest place in the whole process to recover value.
The structure matters as much as the analysis, because the common failure on a first deal is an exclusivity period that expires with a long open list and the remaining items waived under time pressure. The weekly critical path report exists for that reason, since the decision to extend, to push or to walk is only available while there is still time to make it.
To start we need the financial statements and general ledger detail, the seller's quality of earnings report where one exists, and the bank statements and payroll records. We also need the customer contracts, master service agreements and backlog, the supplier agreements, and the headcount and compensation detail. Send the capital expenditure history split between maintenance and growth, the insurance schedules, a litigation summary, and the letter of intent with the draft purchase agreement.
Audit, review and compilation engagements. Any opinion or assurance on financial statements. 409A valuations and certified appraisals. ESOP valuations. Fair value measurement under ASC 805 and ASC 820. Fairness opinions. Tax return preparation and tax opinions. Securities placement, investor solicitation, and any transaction-contingent or success fee.
TEOL Capital is not a broker-dealer, an investment adviser, a placement agent or a finder. Engagements are preparation and support work. TEOL does not place securities, solicit investors or make investor introductions, and takes no success, contingency or placement fee.
The fees published here are indicative, set against the scope described on each page, and a final quote is confirmed in writing before any engagement letter is issued. Nothing published here is an offer, and no engagement begins until a letter is signed by both sides. Work outside the stated scope is identified and quoted before it begins. Full payment or a 50% deposit on engagements under $10,000, and 50% at start with 50% at delivery above that. Turnaround is quoted on receipt of a complete information request and is a target rather than a term of the engagement. Fees are reviewed quarterly, and an engagement letter issued at a published fee holds that fee regardless of any later review. Work is prepared for the client named in the engagement letter and for that client's own use. Anyone else who receives it does so for information and cannot rely on it. Management accounts, consolidations and financial statements we prepare are built from the records management maintains and remain management's responsibility. We do not guarantee any particular outcome, including a sale, a financing, a valuation conclusion or a price. Our liability on any engagement is limited to the fees paid for that engagement.