Is your company planning to acquire another company?
PricewaterhouseCoopers` extensive experience of deals allows us to look at a potential transaction with a global perspective to support you along the whole process. Each deal is different and therefore we tailor our solutions to you, identifying the specific requests of the deal and calling in specialists as appropriate. We coordinate the different teams and provide you an integrated solution to maximise your return on the deal.
The areas that our specialists can cover include, among others, the following:
Financial due diligence
Any organisation considering a deal needs to ensure that the financial information they are provided is as accurate as possible, not only to prevent paying too much but also to make sure that their governance and risk management objectives are met. Without checking that the financial statements about a business reflect the reality, a deal may deliver less than first impressions suggest.
Financial due diligence provides peace of mind to both corporate and financial buyers, by analysing and validating all the financial, commercial, operational and strategic assumptions being made. It uses past trading experience to form a view of the future and confirms that there are no 'black holes'.
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Tax due diligence
Our team of dedicated specialists understands the demands of the tax authorities. They can assess whether a company has been complying with tax requirements or whether it may be facing contingent tax liabilities and advise you on how to deal with these issues during the negotiations.
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Legal due diligence
Our legal specialists assess whether a potential target has all the legal requirements to operate, if it has been complying with all the mandatory procedures/ laws (corporation, labour, etc) and analyse ongoing and potential litigation. In the normal course of their operations companies enter into agreements that, if compromised, may limit new strategies and thus Legal due diligence also includes the review of the contracts in place to assess their implications. Additionally, our legal specialists may help you in drafting the Sale and Purchase Agreement and negotiate representations and warranties.
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Human resource due diligence
People are key assets in target companies. Based on consistent research, over 70% of transactions fail to deliver on their original expectations, due to a failure to address the issues related to people and HR practises. Our HR due diligence identifies the key employees, examines the compensation and progression plan, the culture and organisation in place and beyond. HR due diligence helps to form a basis for the entire integration plan. It gets to the very core in understanding the HR and cultural fit of one organisation with another, as well as raising sensitivity to and awareness of issues that should be proactively managed during integration.
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Commercial due diligence
Any business seeking to make an acquisition needs to understand not only the specific performance of the intended target, but also how this relates to projected market conditions and its competition within a specific industry. Without understanding the unique qualities of the sector a business is in, it is impossible to arrive at a realistic valuation. PwC can provide a commercial due diligence report, involving a thorough review of the company’s business in the context of market conditions and competition. Our commercial due diligence services are supported by our dedicated industry knowledge and our broad geographical reach. Our understanding of specific markets allows us to assess the reasonableness of assumptions underlying projections and provides efficient, cost-effective services in a timely manner.
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Environmental due diligence
The value of transactions to buyer or seller can be significantly influenced by environmental issues or in a broader context by issues related to the sustainable development of organisations. Environmental due diligence assesses the operational environmental performance, analyses the compliance with both current and future environmental legislation and evaluates how environmental issues may influence the company operations and demand for products.
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Operational due diligence
Our team of experienced business operations specialists enables us to provide potential acquirers with a coherent overview of the target’s operations. Operational due diligence cover the full scope of business from supply chain and logistics through to manufacturing and commercial activities. We review management structure and controls and provide an assessment of operational effectiveness. Working with management, operational due diligence identifies and quantifies opportunities for operational improvement, and develops actions to deliver on these opportunities.
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IT due diligence
Following increase in costs and complexity of IT systems and the importance of well-designed processes, IT due diligence has become a crucial part of the overall due diligence assessment. A sound IT due diligence can highlight major risks associated with current systems and procedures. By conducting a thorough IT due diligence, management can assess group-wide synergies and best practices, thereby freeing up resources and easing the integration work.
During an IT due diligence our specialist can
- evaluate the extent to which the IT systems and environment support the current and future business needs;
- examine the level of system integration and evaluate the suitability of the existing integration level to manage information and to help establish data quality and consistency;
- evaluate procedures on IT security, business continuity and disaster recovery;
- examine potential opportunities for enhanced support to the business or ways to reduce IT costs; and
- identify improvement areas and gaps in the current reporting and control processes.
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