Helping to get the deal done

December 05, 2013 | BY

clpstaff &clp articles

Thomas Eastling, director of advisory services for American Appraisal in Hong Kong, spoke to David Tring about the work he is doing on China M&A and how domestic companies still have a lot to learn when it comes to cross-border transactions

What is American Appraisal?

American Appraisal is the leading international independent valuation company, with history of over 100 years. We provide fair market valuation services for all types of assets that appear on a corporate balance sheet. The company has a global network of offices. The Hong Kong office opened in 1977 and mainland operations began in 1994. In addition to the Hong Kong headquarters, we currently have offices in Beijing, Shanghai, Guangzhou, Taipei and a domestic affiliate valuation firm in Shenzhen. Our clientele includes both Chinese domestic firms and multinational corporations (MNCs). We offer both international and domestic (statutory) valuation services.I am in charge of transaction advisory services at American Appraisal. This is part of the company's drive to offer more high value-added services. For Asia, this comprises of mostly M&A, but in Europe this would be corporate finance.

What are some of the biggest challenges with due diligence?

As in any emerging market, buyers in China have to be willing to dig a little deeper than the standard legal, accounting and business due diligence steps in Western markets. This includes deep background checks on executives and suppliers or forensic accounting investigations into potential corruption issues. Foreign buyers have become much more savvy regarding due diligence these days in China, but surprises can still occur even to the wary. The problems Caterpillar had with a major acquisition last year shows how a financially astute company can still run into problems.