Due diligence
Element of:

Corporate Finance

Due diligence

When taking over a company, you want to make sure you are making the right choice. Due diligence provides you with insight into the strengths and weaknesses of the takeover candidate or your own company. For the buyer, this can result in purchase price-reducing factors or the negotiation of specific guarantees or disclaimers. On the other hand, for the seller the investigation forms a good basis for a maximum purchase price or minimal issuable guarantees.

The goal of a due diligence

With a due diligence, we go beyond the actual figures and take the perspective of the acquisition agreements: what do you acquire under which conditions; which strengths result in added value, what are the risks and how can you minimize them? During the due diligence, we scrutinize the company on all financial, tax-related and legal aspects. In addition, it is possible to perform due diligence on the areas of technology, IT, HRM, environment or marketing.

The goal of a due diligence is always that there will be no unpleasant surprises afterwards and that the risk is reduced to a level that is acceptable for the buyer. Together with you, we draw up a risk-oriented plan of action (custom-made). Based on this, appropriate guarantees and disclaimers are formulated or a reduction of the purchase price is realized. We also examine the compliance with the intention agreements between the parties. For the buyer, we identify any skeletons in the closet and give advice on how to handle this. Sellers can solve potential deal breakers in a timely manner, so that a transfer can still take place under, for them, attractive conditions. In case risks become too high or goals appear unattainable, we clearly state this. We are that down-to-earth.

Vendor due diligence

Whereas nearly every takeover process is accompanied by an acquisition due diligence, a vendor due diligence is less self-evident. After all, the purchaser shall at all times carry out its own investigation and not just rely on an investigation that has been performed by the seller. Nevertheless, we always recommend entrepreneurs wishing to sell to apply for vendor assistance. This has the goal of making the transaction go faster and more smoothly. The better you as a seller do your homework, the better the end result will be.

Want to know more about due diligence?

Do you want to know what we can do for you? Please contact our Director Mark Goderie at Baker Tilly Berk Corporate Finance.

 

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