Due Diligence

As a potential purchaser, how do you know if the business you want to buy is what you think it is? It’s often what’s not said by the business owner in these situations that is most important.

If you are considering buying a business or shares in a business, then due diligence is vital.

Discovering hidden information

Due diligence has become increasingly important as businesses have globalized. The number and size of deals, mergers and acquisitions have multiplied dramatically, and with a diligence process that is agile and flexible you can gain a significant competitive advantage in an increasingly intense marketplace.

Due diligence is the process of uncovering scenarios that might not be evident from financial statements. For example:

  • Who owns the assets?
  • Do any undisclosed liabilities exist?
  • Are assets adequately protected by way of patent or trademark where relevant?
  • Is the vendor involved in a legal dispute?
  • How secure are customer relationships?
  • If shares are being purchased, does the vendor have a sound tax compliance history?

Our services include:

  • Reviewing customer and supplier contracts
  • Researching industry trends
  • Reviewing profit history and establishing its relationship to business cashflow
  • Understanding why the vendor wants to sell
  • Establishing if there is any history of industrial relations
  • Establishing whether the vendor has been involved in any past or present legal disputes
  • Reviewing supplier trading terms
  • Understanding if the vendor has pledged assets as security outside of what is immediately apparent.