GEL 100+ Million Transaction in the Georgian Market and Ants’ Due Diligence

Over the past six months, in September 2025 and January 2026, a Georgian real estate investment company acquired two shopping malls in Tbilisi. The total value of both transactions amounted to approximately GEL 102 million (approximately USD 38 million). Within the scope of both transactions, full financial and tax due diligence of the target companies was conducted by Ants.

In transactions of this scale, due diligence represents one of the most critical stages, aimed at providing the investor with a comprehensive understanding of the company’s actual financial position, profitability, debt levels, working capital requirements, and tax risks.

Scope of Work Performed by Ants

As part of the transaction, Ants conducted full-scope financial and tax due diligence, covering the following key areas:

Financial Due Diligence

• Detailed analysis of the last 3 years’ financial statements, management accounts, budgets, and operational data
• Quality of earnings analysis and EBITDA normalization, including separation of one-off and non-operating income and expenses, as well as margin analysis
• Testing of revenue recognition in accordance with IFRS 15 principles
• Calculation of net financial debt
• Analysis of cash, borrowings, leases, and other financial liabilities
• Calculation of normalized working capital and analysis of the working capital cycle
• Review of balance sheet items, including receivables collectability, inventory, provisions, and accounting estimates
• Identification of off-balance sheet and contingent liabilities
• Analysis of cash flow generation capacity, capital expenditure requirements, and operational sustainability

Tax Due Diligence

• Review of compliance with corporate income tax, VAT, and payroll-related taxes
• Assessment of risks related to deemed (indirect) profit distributions
• Identification and quantification of tax risks and liabilities
• Assessment of tax implications of the transaction

Operational Review

• Analysis of the company’s corporate structure, capital, shareholders, and compliance
• Review of key contracts (customers, suppliers, banks, leases), including change-of-control provisions
• Management interviews and business model assessment
• Analysis of customer concentration and key risks

Transaction Support

During the due diligence process:

• A report was prepared, identifying key risks and issues impacting the transaction
• Final financial and tax due diligence reports were prepared
• Due diligence findings were used to structure price adjustment mechanisms in the Share Purchase Agreement (SPA), including:
  • EBITDA adjustments
  • Determination of net debt
  • Working capital analysis
  • Representations and warranties

Importance of Due Diligence for Investors

In large transactions, the primary objective of financial due diligence is to ensure that the investor clearly understands:

• The company’s normalized EBITDA
• The actual level of debt (net debt)
• The working capital required to operate the business
• Whether there are tax risks or hidden liabilities
• The sustainability of the company’s cash flows

These factors ultimately determine the final purchase price and transaction structure.

Role of Ants in the Transactions

In these transactions, Ants acted as the financial and tax advisor to the investor and was fully responsible for planning the due diligence process, requesting information, analyzing data, identifying risks, and preparing final reports.

Ants’ involvement in projects of this scale demonstrates the company’s expertise in financial due diligence, tax due diligence, and financial advisory support in M&A transactions.

About Ants

Ants is a leading accounting, tax, and financial services company, serving more than 700 client companies on a daily basis. The company has been operating in the Georgian market for over 10 years and, in 2023, was named the winner of the country’s largest business awards organized by TBC Bank in the nomination “Outstanding Customer Experience.”

In addition to other services, Ants provides:

• Financial due diligence
• Tax due diligence
• Quality of earnings analysis (EBITDA normalization)
• Net debt and working capital analysis
• Transaction advisory services
• Financial modeling
• Tax structuring of transactions

The company serves both local and international investors and participates in M&A transactions as a financial and tax advisor.