Financial due diligence is all about knowing what you are getting into when buying or investing money into a business. Buying a business may be a step you have considered but have shied away from in the past. Yet acquiring a business can be a quick way to increasing business and shareholder value but of course it carries risks. Our clients have found that due diligence reduces that risk and provides real insights into the challenges and also opportunities ahead which can enable you to plan for the acquisition being considered and give you the best chance of making the business combination work.
Financial due diligence is an investigative process undertaken by business owners or funders who require a detailed insight into a business being acquired or invested in. It is most common during an acquisition process either by the buying party or an individual or funding partner who is providing external finance.
A detailed financial due diligence process is not an option but a necessity and it is important that the vendor appreciates the extent of the work required. Whilst there is no prescriptive degree of detail attached to the investigation process it should enable you to feel comfortable with all key financial aspects of the targets business – both historically and in the short term future. You should also add to this commercial due diligence and legal due diligence as part of the process to cover all angles.
We undertake financial due diligence procedures and processes regularly across a whole range of markets and industries. We:
- Liaise with all parties to ensure smooth and timely transfer of the right information
- Use experts in areas such as taxation where required to minimise risk
- Ensure key financial risk areas are investigated fully
- Provide a range of concise reports as required dependent on the scope
- Provide commercial opinions on risks and suggest sensitivities
- Advise you on ways to reduce risk and issues that may affect price
- Recommend key post-integration processes beyond the acquisition to help smooth transition
Any financial due diligence process is agreed with you as our client to maximise the benefit you get from the process. You will have a formal report you can rely on and a summary in plain English of the issues you need to deal with. Our aim is to reduce risk for you on acquisitions, help you by providing insights into matters you need to manage or correct post-acquisition and provide a report and our opinions of areas that may affect price or business value which can assist negotiations.
If you are thinking about an acquisition or merger, then why not have a free of charge meeting with us to plan and discuss the process. We can also advise you as to appropriate lawyers experienced and able to assist.