Financial due diligence: record the earnings, asset and liquidity situation

Definition: What is financial due diligence? Financial due diligence is about buyers realistically assessing the asset, earnings and liquidity position of the company in which they want to invest. Most important for buyers and sellers is the company’s expected future earnings strength and cash flow. They are also interested in the target company’s asset situation.

Commercial Due Diligence & the Role of Markets

In commercial due diligence, the operating business is examined. The main strategic areas examined in commercial due diligence are the markets in which the company operates, the market position held by the company in these markets, the market strategy(s) and the business model. Commercial due diligence also covers potential market opportunities and risks. Operationally, the

Technical Due Diligence: Technical standards of the assets

Within the scope of technical due diligence, prospective buyers can examine the essential technical assets of a company for sale in order to derive the possibilities and limits for the business. In particular, technical due diligence is concerned with determining the technical and technological standard of the assets, their state of use and their suitability

Personnel Due Diligence: Personnel quality of companies

The quality of a company or a business operation is primarily determined by the people who are active there. Therefore, it is particularly important for prospective buyers to get to know the management team and the employees in the course of a due diligence process. The quality of your management team and the operational processes

Law & Licences: Legal Due Diligence

In a legal due diligence process, prospective buyers examine all legal issues. In particular, they will examine the ownership structure of the tangible and intangible assets for sale and the main existing contracts. Interlocking relationships between shareholders and operating companies sometimes make it less obvious what the legal structures actually are. Prospective buyers will want

Tax Due Diligence: Tax Risks in Company Acquisitions

Definition: What is Tax Due Diligence? In a tax due diligence, prospective buyers focus on recording the tax situation of the company and identifying tax risks in order to structure an intended corporate transaction in such a way that tax risks are manageable for them. Basically, tax due diligence is a privately conducted tax audit

Focus on the environment: Site Due Diligence

In a site due diligence process, prospective buyers systematically check all facts related to commercial real estate. Site due diligence deals with legal, tax, technical and environmental aspects. In the site due diligence process, the seller must first prove ownership by means of purchase contracts and currently certified land register excerpts with a site plan

Due Diligence process: What you need to know

As a seller, do not get involved in exclusive time windows if possible. Many professional company buyers, especially private equity companies, have learned from investment banks and try to shake off other bidders during an exclusive phase, which is then often extended, in order to then drastically reduce the offer price, allegedly based on findings

Sales negotiation and transaction

The negotiation phase Once mediation between prospective buyers and prospective sellers has been initiated and there is mutual interest in pursuing the transaction process further, the will begin at some point. All the results of the negotiations are gradually incorporated into a draft transaction contract. The contract also defines the handover date. The seller’s commitments

Purchase Price Negotiations and Signing

After the prospective buyers have performed , the actual sales negotiation begins. The seller received non-binding, orientative offers from the interested parties, which are now validated against the background of the results of the due diligence. Prospective buyers will try to close the deal, pushing through as many discounts as possible from their initial offer

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