In order to obtain the best possible basis for decision-making in a transaction, it is necessary to carry out a financial review of the target company. Through in-depth analyses, we identify areas associated with risk and thus contribute to increased insight for our client.
Based on the strategic rationale for a transaction, our advisers will help the client to identify both challenges and opportunities, while making specific recommendations as to how areas of risk may be handled in the best possible way.
Vendor due diligence provides potential buyers with a thorough understanding of a company’s financial and tax position. This can help increase the number of bidders, which in turn can lead to a higher purchase price and fewer reservations in the purchase agreement.
Areas typically covered by buy side and vendor due diligence:
- Analysis of the development in turnover and operating result
- Assessing the underlying earnings (Quality of Earnings)
- Assumptions related to budgets and forecasts
- Working capital and net debt
- Cash flow and capex requirements
- Related party transactions
- Accounting principles applied and internal control procedures
- Sources and quality of financial information