If you want to weigh up the opportunities and risks of a transaction.

Buy-side Services

Buy-side Services

With the financial due diligence, we support our clients on company acquisitions and financing processes by aiming to create transparency and a sound basis for decision-making.

The scope of the financial due diligence (scope of work) depends on the extent and speed of the transaction. Regardless of its benefits, due diligence requires a considerable amount of time and money that might prove disproportionate, especially if the transaction volume is rather small. We therefore offer different customised approaches, for example a "red flag financial due diligence" and/or a "full scope financial due diligence".

Red flag financial due diligence

Red flag due diligence enables the potential buyer to carry out an initial assessment of the target based on the available information. It is often implemented prior to the first contact or prior to submission of the Letter of Intent (LoI) or the indicative offer. Red flag due diligence provides the basis for decisions concerning a continuation of the transaction process. The benefits of red flag due diligence are:

  • Early identification of deal breakers
  • Focus on the early transaction phase and issues relating to the purchase price
  • Definition of core topics in coordination with the client
  • Early comment on the key issue of accounting impacts of the acquisition on the extent and recoverability of hidden reserves and goodwill (PPA)
  • Limited scope at manageable costs (efficiency benefits, especially if the transaction is cut short)

Full scope financial due diligence

The full scope due diligence is mandated by the potential buyer and comprises all information about the target which is relevant to the decision-making process in form of a due diligence report. Depending on the scope of work, this type of due diligence covers the following areas:

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The full scope due diligence report provides the following features:

  • Integration and analysis of all relevant areas defined in the scope of work
  • Detailed analysis and commentary
  • Breakdown of the report into management summary, supporting analysis, and appendices

As required, we complement or expand financial due diligence by the following topics:

  • Indicative valuation of the target as basis for purchase price determination
  • Business modelling while considering the potential company acquisition (ex ante, ex post), goodwill, and disclosure of other hidden reserves (indicative PPA)
  • Analysis and review of closing accounts and of compliance with guarantees
  • Analysis of net debt and working capital