Acquisition due diligence
Informed investment decisions
Whether you are looking to buy a business in an auction process, with exclusivity, or making a speculative approach, you will maximise your ability to make an informed investment decision if you have access to swift and comprehensive analyses around key issues.
What are we actually buying? During an acquisition process many questions come up in a short time about the company that you want to buy. Insufficient knowledge of specific transaction risks can lead to things being overlooked and only emerging after the acquisition. In addition, you may miss the right arguments during the negotiation process. In both cases you may find out too late that you have paid too much for the company or, even worse, that you would rather not have made the acquisition.
The question "What are we actually buying?" is central to acquisition due diligence. Deloitte's research focuses on different areas of attention to answer this question, such as:
- The market environment and the position of the company therein
- Organization, important processes, products, clients, suppliers, HR and IT
- Financial performance and trends, by segment and/or country
- Financial position and working capital developments
- Cash flows and seasonality in results, cash flows and financing
- Forecasts, opportunities and risks
- Tax situation and risks
- Pension plans and resulting obligations
- Legal structures and risks
- Real estate situation
- Treasury and risk management
The results of the research provide direction to various aspects of the acquisition. Consider, for example, the structuring and financing of the transaction, the valuation of the company, the sale and purchase agreement and the post-acquisition integration plan. Our due diligence investigation results in one integrated report of findings. If necessary, we use techniques such as Data Analytics to create non-existent information from available data.
However, no process is the same and that is why every transaction requires its own approach. Agreements already made with the seller are important, for example, for due diligence, but also the financing structure and the intended continuation of the business after takeover determine the required depth and required lead time. Your objectives with regard to the proposed transaction determine how the acquisition due diligence process is organised.
Involve your Deloitte adviser as soon as possible in the process. You will quickly receive independent information from the company to be acquired and insights into the most important risks. Our multidisciplinary approach gives you the right arguments in the negotiation process and prevents surprises afterwards. A good acquisition due diligence also provides the necessary comfort to your financiers and other stakeholders.