The term “due diligence” can be interpreted as “due care”. Due diligence is intended to enable prospective buyers who have submitted an indicative purchase offer to you to check whether the information you have provided them with in the process to date, particularly with the data in the data room, is really accurate. Prospective buyers will review your company with a team of specialists, often industry experts, auditors and tax advisors.
Due diligence is usually conducted along operational functions. Accordingly, financial due diligence, commercial due diligence, technical due diligence, UID FEHLT!, legal due diligence and tax due diligence as well as site due diligence processes are very common. The results of these individual technical reviews are interrelated and complement each other. A complete picture emerges only from an integrative development.
With a systematic due diligence process, the transaction risk for prospective buyers can be minimized. In particular, follow-up costs can be estimated with a high degree of probability and, above all, deal breakers can be uncovered, i.e. facts which speak against a purchase decision.
By the way, the use of due diligence is not limited to the case of a corporate transaction. Due diligence can also reveal the status of your company and potential that can be tapped in an ongoing business without any intention of selling. Due diligence is therefore an excellent basis for controlling and risk management and systematic corporate development.