Acquisition due diligence

Due diligence is an important part of any acquisition process. It gives the buyer of a business increased comfort through an independent expert’s assessment of the risks and opportunities of the proposed transaction. It helps to reduce the risk of post transaction surprises as well as providing a sound base from which to plan the post-deal integration strategy.

What will you get from a review?

The scope of a due diligence review should be based on your specific requirements, recognising that due diligence is not a ‘one size fits all’ service. But it should at a minimum provide answers to the following questions:

• Is the information provided by the target and on which you are basing your investment decision reliable?
• Are the historical earnings of the company sustainable?
• What are the potential future earnings of the company?
• How comfortable are you that reported profits turn to cash?
• What are the possible synergies associated with the proposed transaction?
• What are the immediate and future tax consequences of the proposed transaction?
• Is the purchase price reasonable given the results of the due diligence process?
• Are there any “deal breakers”?
• Is the structure of the transaction appropriate?
• What protections should be sought as part of the deal process (warranties and indemnities)?

How we can help

BDO is an acknowledged leader in the provision of due diligence in the mid market to both corporate and private equity businesses. We have an expert, dedicated team providing a full range of financial, taxation, commercial, operational, pensions and employment due diligence services. Most importantly, we work with our clients to understand their strategy and investment rationale and agree the right approach on each and every deal.

Our reviews add real value to the transaction by focusing on the key matters, such as those likely to affect the price or cause post-acquisition issues. We take pride in giving clients impartial and robust advice and go that extra step by both uncovering the issues and then working with our clients to understanding the implications for them. Above all, we get off the fence.