Financial due diligence is an integral part of any company acquisition and is the basis for the associated determination of the company valuation or purchase price. The financial data of the company to be acquired are thoroughly examined and potential financial risks from the transaction are identified.
The time pressure for the analysis of a company before an acquisition or a merger is high, the expectation of the required diligence is no less. The Financial Due Diligence includes the assessment of past, reporting date and plan figures such as balance sheets, income statements and cash flows, but also the structure of personnel, order backlog or customer base. In this procedure, the net assets, financial position and earnings of a target company are analyzed on the basis of external and internal computer systems of the company. However, financial due diligence must be clearly distinguished from an audit such as the annual financial statements audit and a company valuation, as it specifically generates the information relevant to the client.
In the course of our commissioning, we determine, for example, the normalized result, the net debt and identify significant financial risks and effects on key figures. Of course, we prepare a report on current issues, potential deal breakers and recommendations for purchase price clauses or guarantees in the shortest possible time.
For example, the following input may be relevant:
With the Buy Side Financial Due Diligence, we support you as a buyer in identifying financial opportunities and risks of the upcoming transaction, but also in a later phase after closing.
In all things, success depends on preparation - especially in the case of a company sale, which entails a certain duty of care. Through structured and detailed preparatory work in the context of a sell-side financial due diligence, the company sale can be realized in the shortest possible time and at the best prices. We support you here with the preparation of the sales documents (financial factbook) or with a vendor financial due diligence and provide you as the management with the necessary overview.
The question arises, which information is needed to analyze the net assets, financial position and earnings of a target company in detail and to identify the financial opportunities and risks of a possible acquisition? Financial due diligence analyses can have a wide variety of sources, but external accounting always serves as a basic component. The following checklist or questionnaire represents the most important, Present required documents in a consolidated document and can be used directly for financial due diligence - a work aid for the corporate finance department of your company.
In M&A processes it’s all about speed! We discuss with you the process and scope of financial due diligence before the start of the project and recommend certain areas of investigation according to our industry experience. Taking into account customer needs in terms of budget and costs during the transaction, we develop an individual price offer based on a modular approach consisting of a red flag report and full financial due diligence.
We will be happy to discuss your questions and current challenges with you!
Do you have any questions about our services or WTS Advisory? We look forward to your message or your call!