If you’re considering expanding your business through acquisition, or considering a management buy-in or management buy-out, good due diligence is an assurance that your venture is mitigating the risks and is essential.
What is due diligence?
The Oxford Dictionary defines it as “a comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential”.
From a merger and acquisition (M&A) perspective, due diligence is beneficial from both a buyer and seller’s perspective. The process provides the buyer with peace of mind that their expectations of the transaction are correct and mitigates risk. The seller can profit from the rigorous financial examination that may reveal that the market value of their business is more than they initially anticipated.
Is it worth it?
In short, yes. Financial due diligence is a critical aspect of any transaction as it can affect the purchase price or even the decision on whether to proceed with the transaction.
Post-acquisition surprises should also be stopped in their tracks, contributing to less disruption for your business and allowing future strategic plans post-acquisition to be implemented as early as possible.
What Magma can offer
We can provide both vendor and acquisitional due diligence and tailor the scope of our work to ensure it is focused on the areas that are critical to your business.
If you would like to find out more, contact our Corporate Finance team on 01788 539000.
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