Due Diligence requires extensive company and industry analysis, in-depth financial statement analyses, determining possible strategic synergies realizable between companies, and performing an array of valuation analyses. I can imagine that some of those Due Diligence tasks may be outside of your time constraint, especially considering that a thorough analysis is extremely important when considering an acquisition or exit opportunity. As a Buyer or a Seller, Due Diligence can be a daunting task, which can be made easier by using the support of a team of expert analysts with years of experience.
As a Seller you want to make certain that your data is organized and accurately represented to avoid scaring away a buyer or lowering your potential exit value. Lack of order and clear presentation of data can also lead to claw backs after an acquisition – claw backs are exceedingly painful.
As a Buyer you want to be certain that you’re getting value and are aware of the risks/synergies. Buying a business is risky, and risk should be outlined in a disclosure schedule with the ability to withhold escrow for misrepresentations. Potential synergies should be identified with a clear action plan to unlock synergies post acquisition.
Due Diligence Checklist
Company and Industry Analysis:
Financial Statement Analysis:
Valuation Analyses Performed Through the Due Diligence Process:
As described above (analyses described above are not all inclusive), due diligence is extensive and can be a difficult process if you lack the time and resources to execute properly. It’s our goal to make the process of buying or selling a business as easy as possible for you!