How PwC teams work together on an acquisition

Allow us to introduce:

• Dania Hamdan, manager in Deals Advisory
  Dania started at PwC Deals Jordan in 2015 after studying Finance & Accounting. She has been working in the Netherlands for four years in PwC deals , focusing on conducting financial due diligence (FDD) for acquisitions and sales. She primarily works for private equity clients. 
• Gijs van Leeuwen, partner in Deals Advisory
  Gijs started at PwC in 2003 during his accounting education. After seven years in audit, he started working for PwC Deals, in New York and the Netherlands.
• Bart Weijers, senior director in Deals Tax 
  Bart has been working at PwC since 1997. He started as a generalist and has been working for Deals Tax for over fifteen years. This group of tax advisors is specialized in providing tax guidance for transactions, including tax due diligence (TDD) for buyers and sellers, and setting up the transaction structure in close collaboration with colleagues within Deals.

About the project

Private equity investor Bencis was interested in acquiring PNO Group, the European market leader in public financing and innovation consultancy. The corporate finance team of PwC brought the two parties together. PwC was asked to conduct the financial and tax due diligence, which involves a comprehensive analysis of the numbers. Gijs' team, under the leadership of Dania, conducted the Financial Due Diligence (FDD), which investigates, among others, how the organization was able to achieve revenue growth and profitability. Bart and his team conducted the Tax Due Diligence (TDD), which examines the tax risks.

Based on the joint due diligence report on financial and tax aspects, a PwC debt finance team guided the process of financing the acquisition with financiers. After the sale, the PwC delivering deal value team (DDV), led by senior manager Sharan Visser, worked on optimizing the financial reporting of PNO by automating comprehensive financial management reports that are valuable for internal control.

Mapping the drivers of growth

‘PNO Group experienced robust growth, that was clear,’ says Gijs van Leeuwen. ‘Our biggest challenge was to gain further insight into the main drivers of that growth. There was a lot of raw data available, which we unlocked and used to analyse the business, as this provides important insights for our client for the purpose of the proposed acquisition.’

Dania Hamdan explains how interesting she found that research: ‘PNO’s management had a general understanding of the reasons for revenue growth, but our analysis supplemented this understanding by drilling down to the key drivers and insights of the business. This added value to both our client and PNO’s management to better steer the company going forward. I learned a lot about PNO's industry and how accounting works in that context. Subsidy consulting was new to me, so it made it even more educational.’

Investigating international tax risks

The tax team of Bart Weijers, led by senior manager Arjan Vullings, analysed the tax risks. ‘We chose a pragmatic approach to identify the tax risks in the different countries, in consultation with the intermediary (“broker”) of the potential insurers who wanted to cover potential claims arising from the purchase agreement’, says Bart. PwC had close interactions with both Bencis and the broker about the approach. Over the years, PNO had grown with offices in eight European countries, both organically and through acquisitions, functioning decentrally. It turned out to be more efficient to first gather information from the Netherlands for the tax due diligence and then ask targeted questions to the people and advisors of PNO abroad. 

Bart: ‘For example, if there had just been a VAT investigation by the local tax authorities, where limited risks were identified, we could cross that topic off. We discussed the activities, examined the balance sheet and the profit and loss statement and any restructuring or acquisitions. This way, we peeled back the tax situation to the most relevant topics in this business. If necessary, for example in a country where a lot of self-employed workers were employed, local PwC colleagues specifically examined the payroll tax aspects. The client appreciated that we made the work practical in this way and not unnecessarily complex. And the insurers were ultimately willing to offer an insurance policy based on this research.’

Teamwork 

The TDD team consisted of colleagues from different specialist teams, in addition to the core team. The FDD team consisted of five people, who worked together in the office for about four days a week, and one day from home. Dania: ‘At PwC, we place a lot of emphasis on collaboration and development. By regularly working together in the same space, we learn from each other and feel involved in each other's work. We can easily ask each other questions, hear the discussions around us, enrich our knowledge, and it creates a pleasant working atmosphere.’

Gijs: ‘Our FDD group consists of more than 130 colleagues. About a third of the colleagues are women, and a third of our people come from abroad, like Dania. This brings a nice dynamic and new perspectives. The emphasis is on teamwork, we look out for each other and do the work together.’

The collaboration between the PwC teams involved in this client also went very well. Bart: ‘We first had a kick-off meeting with the client and the different PwC colleagues to get to know the company better and introduce our teams. Then we had several working sessions with the tax team and PNO, and we maintained regular contact with Gijs and Dania's team. The due diligence report is a product of our two teams working together. Then after the transaction, our colleagues from delivering deal value took it from there.’

Autonomy and Trust

Bart and Gijs, besides working for Bencis, also had teams working for other clients. They respond unanimously to the question of how they lead their teams. Bart: ‘By giving a lot of freedom and trust, being available, and thinking along at the right moments.’

They both regularly join their teams at the office. Gijs: ‘When I look back at the project for Bencis, I think I provided the main direction and indeed gave the team a lot of space to choose their own approach and also to make mistakes. But whether that worked well, you should actually ask Dania.’

Dania: ‘Yes, that way of working worked very well. I freely discussed my ideas and reflections with Gijs which then gave me a lot of room for the implementation and creativity within the team, which I daily lead. For the PNO project, I led a team of three, consisting of two senior associates each responsible for a key section in the report and they worked on various components of the balance sheet and the income statement. The third associate supported the entire team. Furthermore, I coordinated the communication with the client and the management of PNO. Everyone in the team has their own responsibilities, but we share our insights to get input from each other. That's how we really work together to provide a solid solution for our clients.’