Enhancing the value of private equity acquisitions with efficient purchase price allocation and valuation services

By: Amanda Estevez | Sarah Goldberg | Riddhi Acharya

Talking points

• To capitalize on a more active mergers and acquisitions (M&A) environment, private equity (PE) firms should consider focusing on increasing the value of each acquired portfolio company.
• For enhanced returns, the finance and accounting operations of each acquired company should improve, not diminish, company value.
• Deloitte’s opening balance sheet and valuation services tailored to smaller portfolio companies can help provide efficiency.
  

Finally—after two down years, the IPO market is growing again, with the number of US IPOs increasing 72% during the first half of 2025 compared to the same period in 2024.¹ Robust IPO activity often accompanies a more active M&A environment due to greater available capital , increased valuations, and strategic opportunities. This is what we saw through the first seven months of 2025, with the value of global M&A deals reaching $2.6 trillion, the highest for the first seven months of the year since the boom of 2021.²

What could a more active M&A environment mean for midsize PE firms ? It can create the opportunity to drive higher returns by enhancing the value of each transaction. Achieving this success, however, often depends on managing the finance and accounting operations of each acquired portfolio company to increase company value.

Impact of finance and accounting on portfolio company value

In our work with PE firms, Deloitte sees various finance and accounting-related challenges for midsize PE companies trying to enhance portfolio company value. They include:

• Lack of visibility into the accounting operations of the newly acquired portfolio company during fast-moving M&A transactions.
• A lean portfolio company finance department that lacks a strong technical accounting background.
• Lack of an established quick close process at the portfolio company, which can result in extended timelines for purchase accounting, and drive delays and risk of errors in monthly reporting to the PE.

Finance and accounting surprises during and after private equity acquisitions can be more than mere inconveniences; they’re potential roadblocks on the path to value creation. A typical work-around requires the portfolio company to either engage expensive service providers or reallocate PE firm team member hours to help meet reporting requirements and bring accounting compliance up to relevant standards. While these solutions may be less challenging for larger PE firms and portfolio companies to access, they can be complex, time-consuming, and costly for small and mid-tier companies.

Tailored to smaller PE and portfolio companies

Fortunately, evolving technology has simplified opening balance sheet, purchase price allocation, and valuation services, making them more accessible to smaller companies. Deloitte combines experienced specialists with proprietary diagnostic technology and templates designed to provide these services more efficiently. This approach can help smaller portfolio companies address accounting, audit, and management reporting requirements more easily and cost-effectively, while providing insights on accounting policies to PE firms.

Rapid finance diagnostic technology

Deloitte’s services use finance diagnostic technology and tools to more promptly assess accounting operations within the customary 90-day working capital adjustments window for asset acquisition or equity purchase agreements. These tools are designed to simplify and accelerate the process by providing:

• A systematic approach for gathering critical finance information and evaluating the finance organization, focusing on audit and reporting readiness.
• Insights for PE firms to understand the newly acquired portfolio company’s internal reporting and identify potential compliance risks.
• A simpler path to increasing operational efficiencies in finance and accounting, often reducing costs.

The diagnostics provide a deliverable with actionable recommendations. The advice and recommendations can help portfolio companies understand if they have the necessary skills, processes, and mechanisms to provide required financial information to those who need it in a timely and cost-effective manner.

Templates can simplify compliance

Deloitte’s opening balance and valuation services leverage templates designed to streamline compliance with accounting, audit, and reporting requirements. These templates are customizable to assist with addressing the specific needs and risk profiles of the PE client and portfolio company. Our industry specialists can help connect the dots with advice and recommendations, to increase the benefits of the diagnostics and templates.

What role can Deloitte play?

Deloitte’s efficient purchase price allocation, opening balance sheet, and valuation services can simplify accounting, reporting, and audit readiness for newly acquired portfolio companies. Our experienced industry and technical specialists, backed by diagnostic technology and templates, can reduce the time and expense of accounting and reporting compliance for smaller portfolio companies. For more information, download The power of Rapid Finance Diagnostics: A financial health check for businesses. Don’t hesitate to reach out with any questions.

Endnotes

1 Stock Analysis, “IPO Statistics,” accessed September 2025.
2 Emma-Victoria Farr and Amy-Jo Crawley, “Global M&A hits $2.6 trillion peak year-to-date, boosted by AI and quest for growth,” Reuters, August 4, 2025.

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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