Without doubt the success of an acquisition to an acquirer – be it a corporate or financial investor – can be significantly influenced by the extent and quality of due diligence undertaken. Financial due diligence is a key aspect of the overall investigation into the target.
Our financial due diligence specialists are extremely experienced in providing:
- due diligence for financial investors, banks and private equity houses (e.g. when considering funding a management buy-out, ‘MBO’)
- due diligence in the course of a corporate acquisition, in which case we report to the acquirer’s management and, where appropriate, their funders
- vendor due diligence – this is commissioned by a vendor, but remains a robust independent review upon which ultimately a purchaser can place legal reliance. It identifies potential issues and reduces the probability of these eroding
value as they can be addressed by the vendor rather than being a negotiating tool if left to be found by the purchaser.
The scope of financial due diligence commissioned will always be ‘deal’ specific, but typically includes:
- an in-depth analysis of underlying historic performance, cash flows, assets and liabilities
- a critique of management’s forecasts, including the working capital requirements of the business
- a review of the underlying financial systems and controls
- analysis of the taxation position of the business.
In all cases our report will include a summary of the key issues arising along with our views on the associated risk and implications for the deal. This will include integration and other post deal issues where appropriate