Financial Due Diligence

Solution

Financial Due Diligence

Evaluating the financial health and viability of a business transaction

Financial due diligence involves thorough examination and analysis of financial data to make informed decisions. This process ensures that potential risks and opportunities are identified, enabling stakeholders to make well-informed choices.

Acquisition Due Diligence

Acquisition due diligence is a comprehensive evaluation conducted by potential buyers before acquiring a business. It involves meticulous assessment of financial records, operational processes, and strategic alignment. 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:

  • Financial Analysis: Examining financial statements, cash flows, and balance sheets to assess the target company's financial stability and performance.

  • Risk Assessment: Identifying potential risks, such as contingent liabilities, pending litigations, and regulatory compliance issues.

  • Synergy Evaluation: Assessing potential synergies between the acquiring and target companies to determine the strategic value of the acquisition.

Vendor Due Diligence

Vendor due diligence is performed by the seller to provide prospective buyers with transparent and accurate financial information. This proactive approach streamlines the transaction process and builds trust. The vendor due diligence report must meet the information needs of strategic and financial prospective buyers. Our report therefore provides information on a wide range of aspects of the company, such as:

  • Companies position: The market environment, trends by segment or country, r, important processes, products, clients, suppliers, HR and IT

  • Financial Transparency: Disclosing comprehensive financial data, which includes historical performance, revenue streams, and cost structures.

  • Quality of Earnings (QoE) Analysis: Ensuring the accuracy of financial reporting and identifying any adjustments required to present an objective picture of the company's financial health.

Vendor Assist

As an alternative to a vendor due diligence report, a seller can make a lighter (and cheaper) preparation with a factbook or vendor assist report. This provides prospective buyers with reliable figures and analyzes for their valuation and due diligence. These alternatives are mainly used for smaller transactions with fewer potential buyers.

A vendor assist report also often includes information about other aspects of the company, such as the business model, clients, taxation or other elements. Potential buyers may use this information for their initial bid and to prepare their own due diligence investigation.

Refinancing Due Diligence

Refinancing due diligence is conducted when a company seeks to restructure its existing debt or secure new financing. It involves a thorough evaluation of the company's financial standing to negotiate favorable terms.

Do you recognize one of the following situations: Stagnant growth? Falling margins? Increasing creditor positions / pressure? Backlog of investments? Or shrinking market or other adverse market development?

Deloitte assists companies and their management in times of declining performance, financial stress and transformation. Our typical process begins with the preparation of a 13-week cash flow projection to determine the liquidity requirement during this period. During this process we seek the causes of the declining performance. It is crucial to distinguish between causes and symptoms – our task is to answer the question ‘why’. Having identified these causes, an action plan is drawn up and we can leverage our extensive turnaround experience to help management to implement this plan. Throughout this process, we support management in communicating with banks, shareholders and other stakeholders in order to achieve the best possible result.

Why Deloitte?

Deloitte offers comprehensive support to address your company's challenges in strategic, operational, and financial aspects. We provide insights into the underlying causes of these challenges, enabling us to collaboratively develop a turnaround plan for a stable and improved situation.

Early involvement of Deloitte experts in processes such as acquisition due diligence enhances negotiation outcomes and provides insights into risks. Optimize results with vendor due diligence by leveraging Deloitte's expertise in various support areas, such as information preparation and post-transaction plans. Engaging Deloitte advisors early ensures well-prepared sales processes and opportunities for expansion based on the momentum of successful outcomes. Feel free to reach out to a few of our key contacts via the buttons below.

Contact

André van IJperen

André van IJperen

Partner

I’m a partner at Deloitte Financial Advisory (‘FA’) in the Netherlands with more than 20 years’ experience in M&A, due diligence, IPOs and carve-outs in the Netherlands and United States through a two... More

Eddie van Dinther

Eddie van Dinther

Partner

The last 20 years my focus is to support companies to improve their returns in times of transformation and deteriorating performance. I support Management to understand the root cause of the underperf... More

Johannes Zandvoort

Johannes Zandvoort

Director

At Deloitte the Netherlands I am a Director within Restructuring Services. I am a client focused entrepreneurial advisor looking for added value in a client’s business proposition. With an optimistic ... More