The last thing you want to find after buying a business are skeletons in the closet. Those unexpected ‘surprises’ can potentially turn a successful business transaction into a negative. A professional due diligence exercise will help identify and mitigate those risks in a business acquisition, just as it will achieve in the case of a vendor due diligence prior to a sale.
We believe that an independent due diligence is a pre-requisite for all material investments, acquisitions, strategic alliances and outsourcing arrangements. A due diligence is even more important where:
the purchaser has limited experience in executing transactions;
a material transaction is being considered;
other advisors might be conflicted, or poorly placed to assist;
specialist skills e.g. employee benefits, intellectual property, taxation, real estate, legal or commercial due diligence skills are specifically required.
We focus on the structure of each transaction and the purchaser’s concerns around the people, assets, profitability, cash flow generation ability and sustainability of the Target. We assess the risks and opportunities underlying the proposed purchase in the context of our client’s market and their strategic plan, as well as ensuring that the seller’s expectations do not become unrealistic and incapable of being met by our client (the purchaser).
Our due diligence services range from initial validation of targets to more detailed on-site due diligence investigations to cooperation with transaction integration teams. We assist by providing industry and financial insights, management support and a comprehensive due diligence report (including relevant financial analyses), which drives both the decision making and negotiation processes.
Our team has conducted many due diligence exercises and can tailor your due diligence specifically around Board and other stakeholder requirements. The outputs of a due diligence investigation need to be considered and where quantified, as they have consequences for the valuation of the Target, the purchase price to be paid, the sale and purchase agreement (e.g. definitions, accounting, tax warranties and / or indemnities) and the integration or change management plan.
Our methods are designed to control transaction costs and to reduce negative, post transaction, consequences. To that end we can refer other specialized/niche service providers, all of whom have worked with us as an integral part of our team.