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Corporate Finance

Due Diligence

Due Diligence Prior to Purchasing a Business

When contemplating the purchase of a business, the buyer should be absolutely clear on exactly what they are buying and what liabilities or potential issues come with the business. Entering into purchasing negotiations without carrying out the required due diligence is, in effect, akin to going into the situation blindfolded. In the absence of a detailed assessment of the business for sale, the buyer cannot possibly know if they are paying the right price.

A comprehensive due diligence review will uncover any latent liabilities or overstatements in assets. In certain instances, it can also be used as a tool to negotiate on price.

However, given that due diligence is not part and parcel of the everyday work for many accountancy firms – and the risks involved in getting the assessment wrong – it makes sense to outsource this work to an experienced third party.

Entering purchasing negotiations without carrying out due diligence to uncover any liabilities or potential issues is, in effect, going into the situation blindfolded

To discuss engaging OmniPro to perform a due diligence review, email us or call us today on 053-9100000. We look forward to working with your practice.

How We Can Help

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OmniPro has a specialist team that carries out due diligence reviews on a regular basis.

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In addition to conducting due diligence work, we can also advise on the best way to structure the deal and guide you through the entire purchase process.

Every review is different, as the scope depends on what the purchaser wants to achieve and their prior knowledge of the business under review. However, some elements of that form part of our typical due diligence process including the following:

  • Performing the tax due diligence work and providing a detailed report, summarising the results in order of importance
  • Performing the financial due diligence and providing a detailed report, summarising the results in order of importance
  • Performing the commercial due diligence and providing a detailed report summarising the results in order of importance
  • When acting for the purchaser, assisting with the disclosure letter to be included in the share purchase agreement
  • Advising on the tax and financial warranties/indemnities to be included in the share purchase agreement/tax deed

Steps Involved in the Due Diligence Process

  • Determine the scope of the work and type of due diligence the client wants performed
  • Send out detailed questionnaires covering all areas in scope to the vendor
  • Review responses to queries and follow up as appropriate
  • Assimilate all issues and assess the impact from a commercial and financial perspective
  • Draft due diligence report summarising the work to the client, split by due diligence type, to include issues noted in order of priority
  • Advise on possible steps forward as a result of the issues noted during the process

To discuss engaging OmniPro to perform a due diligence review, email us or call us today on 053-9100000. We look forward to working with your practice.