Services
Due Diligence
Helps assess the risks, financial health and potential of the business
INTRO
What does due diligence mean?
Due diligence is the process of thoroughly investigating a business before making a financial transaction, such as an acquisition, investment, partnership, or merger. It helps assess the risks, financial health, and potential of the business.
Structured approach we adopt in executing on a Due Diligence:
1. Planning and Preparation
Define objectives: Determine the purpose of the due diligence (e.g., buying a business, investing, Merging with another company).
Identify key areas of focus: Hidden debts? Legal trouble? Overinflated profits? All these questions will involve specialist Financial, legal, operational, commercial, tax, and HR experts. These industry specialists will then be required to be assembled for the process to be finalised.
2. Financial Due Diligence
Review financial statements (balance sheet, income statement, cash flow statement) for at least the last 3–5 years.
Analyze revenue and profitability trends to identify risks and growth potential.
Evaluate assets and liabilities, including outstanding debts and obligations.
Assess working capital and liquidity position.
Verify financial projections and assumptions.
Check tax compliance and potential liabilities.
Identify contingent liabilities, pending lawsuits, or financial risks.
3. Legal Due Diligence
Review business structure and ownership documents (articles of incorporation, shareholder agreements, etc.)
Check regulatory compliance and licensing requirements.
Investigate ongoing or past lawsuits, disputes, or claims.
Review material contracts and agreements, including vendor, customer, supplier and lease agreements.
Assess intellectual property (IP) rights, trademarks, patents and copyrights.
Evaluate employee contracts, non-compete agreements and labor law compliance.
4. Operational Due Diligence
Analyze business processes and supply chain efficiency.
Assess technology and IT infrastructure.
Review operational risks, scalability, and cost structures.
Review operational risks, scalability, and cost structures.
Evaluate customer satisfaction, retention rates and service quality.
Check key supplier relationships and dependency risks.
5. Commercial Due Diligence
Assess market position and competitive landscape.
Analyze customer base, demand trends, and sales pipeline.
Review marketing strategies and brand positioning.
Evaluate pricing models and revenue streams.
Identify industry risks and growth opportunities.
6. Human Resources Due Diligence
Review employee contracts, benefits, and compensation structures.
Assess organisational structure and key management team.
Identify potential labor disputes, turnover rates, or HR risks.
Evaluate cultural and leadership alignment.
7. Tax Due Diligence
Review past tax filings and payments.
Identify potential tax liabilities or pending audits.
Evaluate tax structures and incentives.
Assess cross-border taxation issues (if applicable).
8. Environmental, Social, and Governance (ESG) Due Diligence
Check for environmental compliance and sustainability practices.
Identify reputational risks or ethical concerns.
Assess social responsibility and corporate governance standards.
9. Risk Assessment and Final Report
Summarize key findings and risks.
Identify red flags, liabilities, or concerns.
Provide recommendations and mitigation strategies.
Final recommendations (Proceed, Renegotiate, or Walk Away)
Support negotiation and decision-making.
Summary
Think of due diligence like buying a used vehicle — but instead of just kicking the tires, you’re checking under the hood, scanning the history report, and making sure you’re not buying a lemon. The planning and preparation stage is your roadmap to ensure you don’t walk into a bad deal.