Our financial due diligence is focused on the following key questions:
- What have been the key drivers of growth and profitability and what are they likely to be in the future?
- Do the projections support the price I am going to pay and how do they compare to the normalised history?
- What are the principle risks and assumptions to the projections?
- What are the balance sheet exposures and contingent liabilities?
- What are the tax exposures: taxation due diligence.
- What level of working capital / cash requirement should the business have?
However, in most business plans the projections show a stepped change compared to the normalised history. This improvement is predicated on:
- Improving the operations: operational due diligence
- Extracting synergy benefits from bringing more than one business together: synergy analysis and validation
- Delivering improved top-line performance: commercial due diligence
We find that people and/or systems will make or break the deal.
- “We don’t back businesses, we back people.” How do you make sure you are backing up the right team? Management team due diligence
- How do the available technologies facilitate or restrict the value realisations in the business? Information systems due diligence
In many ways, a deal starts at completion as from that point the benefits and value that the deal was designed to deliver need to be realised. Transition and integration services.
