As deals are complicated and loaded with "hidden" risk, stakeholders do not always get the correct Enterprise Value anticipated from their transaction. This happens because of information gap between buyers and sellers in every deal. At Veristrat, we help clients to alleviate risks, gangplank this information gap and magnify returns on deals by commissioning a financial due diligence team.

Due Diligence overview

Due Diligence is what investors should do before investing in a company. It is the deliberate, thorough investigation of a potential investment to validate all facts such as reviewing all financial records, assessing risk and compliance issues, conducting tax and financial planning and identifying hidden cost. Our in-house team of experts help clients in evaluating and investigating a prospective business decision by getting information about the legal, intellectual, financial and other material information from the seller.

Buy side Due Diligence overview

A Buy Side Due Diligence is an exhaustive review of a target company when a buyer wants to acquire a company. In such a situation, the buyer needs to get the complete understanding of the situation of the target company. Buy side Due Diligence can be described as the examination and analysis to determine the suitability and the key issues that a target's company is facing. There is a strong focus on the financial business drivers so that historic and projected results can be determined. Buy side Due diligence inspect all the areas of the company.

Importance of a Buy side Due Diligence

  • It enhances the purchaser's understanding of the target business and therefore increases the likelihood of the deal achieving its objectives.
  • It addresses the plus and minus issues in the deal.
  • It helps in identifying and understanding the critical success factors which will result in improved understanding of all the relevant issues in the deal.
  • It helps in identifying the quality of earnings adjustments—sustained level of EBITDA going forward on a standalone basis.
  • It helps in identifying the potential debt-like items—highlights significant off-balance sheet liabilities, commitments and contingencies or other significant items that may affect value.
  • It helps in identifying the working capital trends and adjustments—working capital levels of the company, cash flow impact of movement in the working capital levels, estimating benchmarks and potential adjustments required to assess the normalized level of working capital required.
  • It helps in identifying the pending tax assessments and litigations from a direct and indirect tax perspective.

How we support you?

Our team at Veristrat understands the intricacies involved in due diligence and we strive to do our best in order to achieve superior results for our clients. We assist our clients in the following ways:

  • By getting the comprehensive understanding of the target company.
  • By getting an understanding of possible risks in all areas of the organization (including legal liabilities or compliance issues)
  • By checking,fine tuning and extending the potential synergies and assigning them to business owners.
  • By assessing the future order intake and seeing if it matches the projected numbers.
  • By assessing the competency of managers and senior business leaders.
  • By clearly identifying the business drivers that will be critical to the future success of the company.
  • By getting a critical opinion on how realistic a purchase price is.
  • By spotting material deal breakers (now there is still time to stop a transaction)
  • By getting input for future legal documents (LOIs and SPAs)
  • By achieving the bank financing.
  • By providing Input to fine tune the business plan.
  • By preparing for post-acquisition integration.

 

Our in-house experts provides imperative information about all aspects of a business so as to provide high end quality results to our clients. Our expert due diligence team helps clients in understanding target business and therefore increases the likelihood of the deal achieving its objectives.