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Whether you’re buying or selling a business, due diligence is likely to emerge as a key step of the transaction process from its infancy through to completion. It’s one of the most important processes in an M&A deal as it can reduce your risk, as a buyer, through confirming the accuracy of the seller’s claims.
We have earned a reputation for providing timely, relevant and value-added due diligence advice and reports. Make sure you have the information you need before making critical decisions, with the help of our financial due diligence team.
Without doubt, the success of an acquisition to an acquirer, be it a corporate or financial investor, can be significantly influenced by the extent and quality of the due diligence undertaken. Financial due diligence is a key aspect of the overall investigation into the target.
TYPES OF DUE DILIGENCE
Our financial due diligence team comprises specialists who are deeply committed and experienced in providing:
- Buy-side due diligence for corporate acquirers, in which case we report to the acquirer and, where appropriate, their funders.
- Vendor-side due diligence – this is commissioned by the seller but remains a robust independent review upon which a purchaser can ultimately place legal reliance. It identifies potential issues and reduces the probability of these being used by a purchaser to reduce the price. This is because they can be presented in a managed way by the seller, rather than being identified by the purchaser and used as a negotiating tool.
- Funder due diligence for investors, banks and private equity houses (e.g. when considering funding a management buy-out).
TYPICAL ELEMENTS OF THE DUE DILIGENCE PROCESS
The specifics of the deal always determine the scope of financial due diligence. However, the process typically includes:
- an in-depth analysis of underlying historic performance, cash flows, assets and liabilities;
- a critique of management's forecasts, including the working capital requirements of the business;
- a review of the underlying financial systems and controls; and
- analysis of the taxation position of the business.
Our reports will also include:
- a summary of the key issues that have been identified by our work; and
- our views on the associated risk and implications for the deal, including integration and other post-deal issues where appropriate.
We have a reputation for thoroughness, so you can transact with more confidence, knowing that any issues have been properly reviewed and thought through. Also, we aim to identify key issues at the earliest stage so you can reach a ‘go/no-go’ decision earlier.
From our experience working with our clients after an acquisition or merger is complete, the first 100 days is crucial, no matter what the business. During the course of a deal you are surrounded by professionals to help you make the correct decision at the right time. But what happens next?
The next phase can be challenging, continuing the success you have worked so hard to achieve and balancing requirements with your existing teams. This can require additional advice from professionals and that is where we can help. The RSM team will stick with you to help you with any issues that arise post completion and our team of after the deal experts will be on hand from day one to help assist you.
We can assist you with tasks such as bookkeeping maintenance, payroll and HR administration, VAT compliance, post deal operations, financial and systems improvements and many more. The after the deal team will offer tailored support to suit your business needs and you will be fully supported by our specialist teams throughout the firm.
