Financial due diligence

We perform comprehensive financial due diligence to help you improve your understanding of the business, identify value drivers, optimize M&A transaction structure, and mitigate potential risks. Additionally, we thoroughly assess assumptions about future performance to facilitate a more objective valuation.

Financial due diligence increases the chances of a successful transaction by enhancing the quality of information available to decision-makers and facilitating informed decisions. From a buyer's perspective, it helps to build confidence in the transaction's expectations. From a seller's perspective, it enhances the buyer's trust and improves the flow of information between the parties. Additionally, due diligence may provide additional benefits to the seller by identifying hidden value and synergies, which can increase the fair value of the company

What are the key questions that we seek to answer by performing a financial due diligence?

Do historical reported financials reflect the underlying business and run-rate profitability?

Through financial due diligence, we aim to determine the underlying profitability of the company by examining its historical reported financial results. This process involves identifying non-recurring items in the income statement that may overstate or understate the company's underlying profitability.

What is the company's true net debt level?

We identify balance sheet and off-balance sheet items that may increase or decrease the company's debt exposure. In addition to the usual cash balance and loan obligations, we consider other items that are similar to cash or debt, such as committed CapEx obligations, debt-like working capital items, and open litigations, among others.

How could accounting issues materially affect the value of the company?

In the due diligence process, we consider the accounting practices and standards used by the company to report its financials. We analyze standards such as IFRS 16 and assess their impact on the company's financials.

Are there any synergies stemming from the transaction?

We identify potential synergies that may result from the transaction, and evaluate the likelihood of them materializing as well as their impact on the financial statements. This practice is used as an input in the valuation of the company.