Corporate Finance - Due Diligence

Adding commercial value to your transaction

Tax disputes

Financial due diligence is carried out to assist a prospective purchaser, investor or funder to make an informed judgment as to whether to proceed with a proposed transaction or not.

There are a number of purposes to the exercise:

  • Identify potential deal breakers
  • Challenge, question and test the information upon which a decision has been made
  • Assist in the negotiation process via the disclosure of weaknesses or areas of risk
  • Identify post completion issues
  • Review net assets
  • Highlight areas where additional warranties are required

What areas are typically covered?

  • Historical trading results
  • Accounting policies
  • Marketing strategy, pricing, competition and competitive advantage
  • Production and suppliers
  • Management and staff
  • Projected trading results and cash flow
  • Sensitivity analysis
  • Net assets
  • Key business weaknesses

The above list is not exhaustive, and should be taken as a guide only as to the areas which may be covered in a due diligence investigation.

Fieldwork

Fieldwork is generally carried out at the company’s premises. As part of the investigation it may also be necessary to review the company’s auditors files.

During the fieldwork other risk areas may be identified that are not covered in the engagement letter. These would be discussed with the client immediately to determine if they require the scope of the assignment to be extended to include an investigation into these additional risks.

Reporting

A written report is presented to the investor and will usually be discussed at a suitable meeting. The report will highlight and give opinions on:

  • Any issues of such significance as to be potential deal breakers
  • Any issues that are not deal breakers but may indicate a need to renegotiate the price or the terms of the proposed investment
  • Any issues which will need to be considered post acquisition

The key to carrying out an effective due diligence investigation is designing terms of reference which focus on the key risk areas. In order to achieve this we undertake a comprehensive review of all of the information which the investor has used to arrive at their decision before discussing the scope of the assignment. Based on this review and further discussion with the investor we are able to define a terms of reference which covers the main concerns of the investor in an efficient and effective manner.

Hawsons Corporate Finance adopt a risk-based approach to due diligence investigations so that our work is directed to those areas that are considered to be high risk. The output of our work is a focused report that addresses the issues that are relevant to the investor.

Contact us for a free initial meeting

To find out more about how one of the leading firms of accountants in Sheffield, Doncaster and Northampton can help you, please contact one of our specialists. We believe in long-term client relationships and understand the importance of meeting to establish that you like us and we like you. This is why we offer all new clients a free initial meeting which will enable you to have a discussion about you and your business issues.

To book your free initial meeting, please click here.

We look forward to hearing from you!

Pete Wilmer

Pete Wilmer

Corporate Finance Partner

0114 266 7141

[email protected]

Mike Turney

Mike Turney

Director of Corporate Finance

01604 645 600

[email protected]

Jack Ware

Jack Ware

Corporate Finance

0114 266 7141

[email protected]

Our offices

Pegasus House, 463a Glossop Road, Sheffield, S10 2QD

5 Sidings Court, White Rose Way, Doncaster, DN4 5NU

Jubilee House, 32 Duncan Close, Moulton Park, Northampton, NN3 6WL

Sheffield

0114 266 7141

Doncaster

01302 367 262

Northampton

01604 645 600

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