Closing before or after year end

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by a searcher
in Vancouver Island, British Columbia, Canada

1yr ago

Closing before or after year end

Hi All!

The seller’s year end is Aug 31, and he is hoping to finalize the transaction prior to this date. Are there any pitfalls to doing so, that I should be concerned with?

I have contacted numerous accountants on Vancouver Island, but all have been too busy to chat.
I welcome you feedback.

All the best!

Mike

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reply by an investor 1yr ago
from Hamilton College in Port Orange, FL, USA

Always take caution if someone is in a rush to sell. Suggest getting a clear understanding of the reasoning directly from the seller and think critically about it as you frame up diligence. Depending on where you're at, 60+ days to get a deal done is possible but you'll need to be efficient and thorough.

reply by a searcher 1yr ago
from Bowling Green State University in Surrey, BC, Canada

Sounds like the seller wants to avoid doing two sets of statements - year end then a stub-to-close period. That's the non-nefarious answer.
If there's performance issues in the company, the seller could be trying to rush through close. Keep a careful eye on interim financial reporting, AR, AP, Inventory for any warning signs.
Good luck!