Our Due Diligence Process
1. Financial Review
When we represent buyers, we typically:
– Validate pro‑forma EBITDA
– Justify add‑backs and non‑recurring expenses
– Assess the appropriate level of normal working capital
– Comment on value drivers and operating cash flows
– Comment on net debt position and working capital
– Challenge the reasonableness of forecasts and projections
– Challenge the assumptions underlying the valuation
– Review related‑party transactions and standalone costs
When we represent sellers, we typically:
– Organise, maintain and provide due diligence materials to the buyer
– Help negotiate business aspects of the definitive agreement
– Provide an independent review of the overall value established for the business
2. Financial Statements & Accounting Policies
We inspect the target company’s historical financial statements and accounting policies and procedures. These reviews usually cover:
– Accounting systems and records
– Internal accounting procedures
– Audited financial statements — including cash, trade receivables and payables, property, plant & equipment, contingent liabilities, impairment (financial and non‑financial assets), and revenue/expense recognition
– Review of the auditors’ work papers
– Tax liabilities and obligations
3. Business & Reviews
We can investigate specific areas of concern about the target’s industry and operations for an in‑depth view of:
– Industry
– Competitive environment
– Products and services
– Customers
– Key suppliers
– Sales and marketing
– Information technology systems
– Human resources issues