Hazlewoods is an acknowledged leader in the provision of due diligence services and was voted Specialist Due Diligence Provider of the Year at the 2009 M & A Awards. We have an expert, dedicated team providing a full range of financial and taxation due diligence services to both corporate and financial investors.
We provide partner lead support throughout the transaction process, from pre-deal evaluation through to completion and post-deal support.
The due diligence process can be perceived as expensive, time consuming and pedantic. So, is it a valuable part of the acquisition process or a necessary evil? Not many would argue with the fact that due diligence is necessary because a confirmation of the accuracy of the financial information on which an offer is based is vital. However, the importance of the due diligence process goes far beyond this. Due diligence is also about the identification and avoidance of risk, and providing a sound base from which to plan the post-deal integration strategy.
Financial due diligence focuses on the past, present and future, including:
- an in-depth analysis of underlying historical performance, cash flow generation, assets and liabilities
- a summary of the key strengths and weaknesses of the business, its products services and employees
- a review of the underlying financial systems and controls
- management and employee considerations
- an analysis of the Company’s taxation position, highlighting potential liabilities and risks
- a detailed review of the Company’s financial projections, including comment on the reasonableness of the principal assumptions, key sensitivities, and the principal differences in projected and historical results
The scope of a due diligence review should be based on your specific requirements, recognising that due diligence is not a ‘one size fits all’ service.
Increasingly, due diligence is no longer the final step taken in an acquisition, but forms part of the negotiation process itself. Acquirers are using it to negotiate both price and structure, saying “If we can’t eliminate that risk, the deal needs to change to this…”. Due diligence is also complementary to the negotiation of vendor representations and warranties.
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