Transaction advisory
When to bring in a transaction adviser
Why advisers who arrive after the price is agreed have less to work with — and what diligence is cheaper to run before signing.
Read the briefingBriefings from ISTEFAN CONSULTING LLC
Insights on strategy, transactions, and performance
Practical briefings on the questions we handle most often: how to structure a transaction, where working capital hides, when restructuring becomes necessary, and how to tell whether a strategy is actually working. These articles are written for owners and executives who need a clear view, not a literature review.
Where the questions usually start
Owners come to us with the same handful of problems in different clothes. Each briefing below takes one of them and works through what actually changes the answer: timing, sequence, and who owns which decision.
Read the one closest to your situation, or work down the list — the later briefings assume the earlier ones.
Working capital
Where working capital quietly disappears
Receivables, payables and inventory rarely fail loudly. Here is how to find the cash that is already inside the business.
Read the briefingRestructuring
Signs that restructuring is on the horizon
The warnings usually show up months before the crisis. A short list of what to watch and when to act on it.
Read the briefingStrategy
What strategy looks like when it works
Three traits that separate a plan someone owns from a document nobody reads after the offsite.
Read the briefingWhen to bring in a transaction adviser
Deals often start with enthusiasm and end with a list of surprises. The usual cause is timing: advisers get involved after the price is agreed, when the leverage to fix problems has already been spent.
Bringing in transaction support earlier, during target screening or before the letter of intent, changes what you can negotiate. Due diligence on quality of earnings, customer concentration, and working capital norms is cheaper before signing than after — the findings still exist, but the room to price them has closed.
What we usually review first
- Quality of earnings, and which adjustments a buyer is likely to challenge
- Customer concentration and how much of the forecast depends on one relationship
- Working capital norms, so the peg is defensible rather than negotiated from scratch
- Whether the integration assumptions have an owner on your side
Where working capital quietly disappears
Most companies track cash at a high level and miss where it actually goes. None of the leaks below shows up as a crisis, and together they can tie up enough cash to limit growth. A cash conversion review usually finds more than management expects.
Receivables age quietly
Follow-up is inconsistent, so invoices drift past terms without anyone noticing until the month-end report.
Payables get paid early
Because the process is convenient for the vendor, not because the terms require it. That convenience has a price.
Inventory sits on optimism
The last order was placed against a forecast that did not arrive. The cash is in the racking, not the bank.
Terms live in people's heads
When payment practice depends on who is at the desk, no one can tell you what normal looks like for the business.
Each of these is fixable inside the current operating model. The point of a review is to size the leak before deciding whether to chase it with process, terms, or pricing.
Signs that restructuring is on the horizon
Restructuring rarely arrives without warning. The signals are usually visible months earlier: forecasts that miss repeatedly, covenant headroom that keeps shrinking, vendors asking for faster payment, and management spending more time on lenders than on customers.
Acting while options are open is easier than acting after they close. A candid assessment early often avoids a formal process later, because it separates a liquidity problem from a profitability problem before the two get tangled.
What strategy looks like when it works
Trait one
It names what the company will not do
Trade-offs are the content of a strategy. A plan that keeps every option open has not made a decision yet, and the operating model will not change.
Trait two
It connects to the operating model
Someone owns each part. If a priority has no name beside it in the plan, it is a wish rather than a commitment.
Trait three
It carries measures that show progress
You can tell whether it is on track before the annual review, which is the only moment that matters for a correction.
Strategies that fail usually have none of these: broad ambitions, no trade-offs, and no way to tell whether anything changed until the annual review. When we are asked to review an existing plan, this is the first test we apply.
Performance improvement without cutting to the bone
Cost reduction gets most of the attention, but it is not the only lever. Pricing discipline, procurement, and process simplification often produce more durable gains than headcount reductions, which tend to damage capability and morale.
The question is where margin is leaking and whether the fix can be sustained. Cutting costs that generate revenue is rarely a good trade — a smaller team with the same workload usually finds a way to spend the difference somewhere less visible.
We start with the pricing architecture and the purchasing book, because both are measurable before anyone's role changes, and both tend to hold once the attention moves on.
Cross-border operating questions
Companies operating in more than one country deal with reporting differences, currency exposure, and the practical question of who decides what. These are operating model questions, not just accounting questions.
Getting the decision rights clear usually resolves more friction than any reporting change, and it makes the finance work simpler afterward — the consolidation stops arguing with a structure nobody agreed on. Currency exposure then has a named owner instead of a quarterly surprise, and local reporting differences stop being read as performance differences.
In practice the sequence matters: agree who decides, then agree what gets reported, then standardise the reporting. Reversing those steps is the most common reason a cross-border finance project stalls.
How to evaluate a consulting proposal
A good proposal is specific about deliverables, timing, and fees. It says what the consultant will do and what they need from you. It does not promise outcomes that depend on decisions you have not made yet.
If a proposal is vague about scope or heavy on credentials, ask for the work plan. The plan tells you more than the pitch — who does the work, in what order, and what happens if a finding changes the shape of the engagement.
What to look for in the document
- Deliverables
- Named outputs you can point at when the work ends, rather than a description of the approach.
- Timing
- A sequence with checkpoints, so you can stop or redirect before the budget is spent.
- Fees
- How they are calculated and what would change them. Contingency language is worth reading twice.
- Your inputs
- What the firm needs from your team, and how much of your people's time the engagement assumes.
- Boundaries
- What is explicitly outside scope. A proposal that claims everything is a warning sign, not a bargain.
What to read before your first consulting engagement
Bring your last twelve months of financials, a sense of where the pressure is coming from, and a clear view of what you want to be different. You do not need a polished problem statement. Most engagements start with a rough description and get sharper in the first working session.
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Step 1
Gather twelve months
Monthly financials, not annual summaries — the shape of the year matters more than the total.
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Step 2
Name the pressure
Cash, margin, a stalled decision, a difficult customer — say it plainly and let it be refined later.
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Step 3
Decide what changes
One or two outcomes you would recognise if they happened. That is enough to scope a first session.
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Step 4
Bring the right people
Whoever owns finance and whoever owns operations. Decisions made without them tend to come back.
Have a question these briefings did not answer?
Bring the situation as it stands. We will tell you which of these questions applies first, and whether the work is better done as a short review or a longer engagement.