When buying or selling a business due diligence is a critical step in the evaluation and validation of a company and / or its assets prior to the exchange of contracts. The process provides an independent, comprehensive review of the target and should provide a significant contribution to the decision making process.
Without doubt, the success of an acquisition or investment will be significantly influenced by the extent and quality of the due diligence undertaken as an essential element of the overall investigation into a business. Financial due diligence provides comfort to all parties by analysing and validating the assumptions and views being made, ensuring that future risks are identified and addressed.
In today’s challenging economic environment, sellers, investors and funders are more cautious about the risks they take. Every piece of information is crucial to a deal, leaving no room for error or omissions when it comes to financial due diligence, so professional guidance and support during this process is imperative for a successful transaction.
No two transactions are ever the same and we would always recommend a purchaser undertake a due diligence review, to provide a comprehensive, accurate, actionable risk management tool to help drive your transaction through to a successful completion.
What needs to be covered in a due diligence review?
- In-depth analysis of the historic performance of the target business including cash flows, assets and liabilities
- Review and testing of management forecasts, including working capital requirements as well as key assumptions relating to projected growth and associated costs
- Review of the underlying financial systems and controls
- Examination of the synergies expected from combining the target business and purchaser
- Assessment of the businesses tax position.
Buyers Due Diligence
When purchasing a business, a specialist evaluation of the opportunity is essential to providing reassurance and identifying future risks.
The scope of the review we carry out is tailored to your requirements; focusing on areas such as company structure, deal structure, financials, contracts, forecast assumptions and potential tax implications, highlighting any critical elements early on the in the process.
Vendor Due Diligence
When a company reaches the point of sale, a transparent overview of the business can help to grow its value in the market. Financial health including its historical, current and future performance is a key aspect for buyers and funders in their appraisal and valuation.
Vendor due diligence aims to highlight and address areas in the business that are likely to be of concern to buyers. Highlighting these early may enable the vendor to address the issue, or at least to prepare a better negotiating position ready for when the buyers raise the points.
How we can help
Our multi-disciplinary, due diligence team, lead by an investment industry expert, are well placed to provide a full range of services in a timely manner, offering relevant, value added advice and reports focusing on the most critical elements in each transaction. All aspects of our service are led by Directors or Partners with many years of deal management experience.
For more information please contact a member of our team below:
Head of Investor Due Diligence0151 2552300Liverpool & Manchester