M&A / Due diligence

Mergers and acquisitions (M&A) refer to transactions between two companies combining in some form. Before engaging in mergers and acquisitions transactions, conducting thorough due diligence is crucial.

Due diligence is usually prepared before purchasing companies, shares or an organized part of the enterprise. Due diligence is also taken into consideration before making decisions on merges, restructuring and other decisions involving capital investments.

Due diligence allows potential investors to make rational and optimal decisions. Contents of that document could constitute a strong negotiation instrument as it gives a certain value to the subject of transaction.

Due diligence aims at:

• identification and verification of the information on the subject of due diligence analysis (in the form and structure accepted by the Client),
• identification and quantification of the risks and threats within the organization covered by due diligence.

Approach

Due diligence analysis is performed by a team of consultants with specific knowledge, amongst others in the areas of financial law, tax law, commercial law, civil law and employment law.

Due diligence is adapted each time for a specific organization, expectations of potential investor and the indicated goals.

The outcome of this complex analysis has often an essential influence on the overall view of the company and its profitability along with risk assessment connected with the investment.

This type of research usually has a much broader range than a balance sheet audit, tax audit or an overview of the company’s books.

Range of tasks

Depending on Clients needs, due diligence can differ on the range of tasks involved. The basic areas that we offer to take into consideration during the research are:

• financial aspects – especially: assessment of the accuracy of the assets and liabilities evaluation and the financial results accuracy, identification of significant changes within the assets, liabilities, incomes and costs, identification and assessment of the business operations influencing the financial situation, identification of off-balance-sheet commitments, assessment of the agreements entered into that may influence the financial situation),
• tax aspects – especially: assessment of the accuracy of the tax settlements and possible threats connected, identification of business operations for which the divergence in the interpretation may occur between the company and the tax authorities)

That rage of research can be extended to different areas depending on the Client needs.

What the Client receives

The outcome of the conducted analysis is a report that contains:

• presentation of discussed information,
• thorough description of vital activities, operations and positions in the balance sheet,
• description of the risks and errors in the tax area,
• description of the threats caused by settled agreements,
• risk quantification and its influence on the net assets.