Pre-purchase audit of a steel warehouse
Our client was planning to buy a warehouse. We detected errors in inventory accounting for the amount of 84k PLN. Thanks to this, we negotiated a lower purchase price by 110k PLN.
The owner of Stal-Expert Holding wanted to acquire a smaller warehouse in the vicinity of Gliwice. He needed certainty that the price of 3.2 million PLN was reflected in the goods on the floor. Our analysis showed that reality differed from the entries in Excel.
The challenge
The company up for sale declared inventory worth 1.24 million PLN. During the initial visit, we noticed that the stacks of cold-rolled sheets looked smaller than the documents suggested. The client feared paying for 'air' and dead stock that no one had verified for 9 months.
Our approach
We sent a 3-person team from Silesia Capital Advisors directly to the hall in Chorzów. For 4 business days, we counted sheets, profiles, and rebar. We compared the physical state with purchase invoices from the period from October 2023 to April 2024. We focused on items that accounted for 76% of the value of the entire current assets.
The solution
We created a reliable report of inventory differences. We demonstrated that 84,200 PLN in the tables were errors in weighing and no longer existing items. Additionally, we found a batch of reduced-quality steel that was recorded as a full-value product. We prepared a list of specific arguments for the client to lower the offer price.
Results
Thanks to hard data from the floor, the seller had no room for discussion. The client bought the company 110,000 PLN cheaper, which more than covered our fee. The transaction was finalized 14 days after the audit ended.
Timeline
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06.05.2024Meeting with Stal-Expert board and analysis of the initial offer
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13.05.2024Physical inventory in the warehouse hall in Chorzów
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21.05.2024Presentation of the audit report and list of comments on the price
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28.05.2024Signing the purchase agreement including the discount
"We were a step away from overpaying for goods that were not physically in the hall. Silesia Capital Advisors approached the topic without unnecessary fluff. They found the errors in 4 days, and we saved concrete money."