Due diligence

Due diligence

Whether you’re a corporate entity, private equity firm or high-net-worth individual, it’s important to ensure your acquisition delivers strategic and/or enhanced profitability while minimising financial and tax risks.

Our due diligence process is designed to help you interrogate financial, commercial and operational assumptions, rate the level of risk involved in the transaction, explore strategies to address risks or make adjustments, as well as suggesting when to walk away from an unsuitable deal.

Due diligence clarifies the strengths and weaknesses of the company you’re thinking of buying, or your own company for that matter. This could affect the purchase price, or negotiations concerning guarantees or indemnities. At Baker Tilly Staples Rodway, we offer you due diligence support in the following areas:

  • Financial due diligence
  • Tax due diligence
  • HR due diligence

We have the flexibility to respond to tight deadlines and can draw on the expertise of auditors, dedicated tax consultants, HR specialists and other experts as required.

If you are looking at buying the assets of a business, we can help you assess the quality of working capital, fixed assets and unreported capital expenditure requirements.

The ultimate outcome of a due diligence engagement is an insightful report detailing the quality of earnings and assets as part of our findings, providing recommendations for post-acquisition improvements, suggesting potential purchase price adjustments, identifying key risk areas that should be ring-fenced, and highlighting issues that could be deal breakers.

The value of due diligence

For buyers:

  • Understand revenue and earnings drivers, as well as potential upsides
  • Identify cost structures and cash flow risks
  • Assess the quality of assets such as working capital
  • Highlight reported and unreported liabilities and obligations
  • Uncover issues early with the opportunity to reassess, modify and proceed, or exit
  • Opportunities to de-risk a deal and/or renegotiate to better reflect the risk profile of the business
  • Reveal potential deal breakers

For vendors:

  • Identify issues that could negatively affect price and fix them early
  • Normalise earnings so the business is presented in the best light
  • Prepare you for difficult questions from potential buyers
  • Enhance business continuity so you are better positioned for price negotiations
  • Suggest the timing, pace and process of the sale
  • Ultimately lead to a higher sale price

Deal assistance

We can assist and shepherd you through the full deal process, including reviewing sale and purchase agreements, and structuring the purchase entity (including the debt and equity mix) ensuring tax efficiency and compliance with thin capitalisation requirements.

Services

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