If you are considering buying a business or shares in a business, then due diligence is vital.
Discovering hidden information
Due diligence is the process of uncovering scenarios that might not be evident from financial statements. For example:
- Who owns the assets?
- Do any undisclosed liabilities exist?
- Are assets adequately protected by way of patent or trademark where relevant?
- Is the vendor involved in a legal dispute?
- How secure are customer relationships?
- If shares are being purchased, does the vendor have a sound tax compliance history?
Accru has completed the due diligence in a number of transactions ranging from a $1m sale of a manufacturing company to a $90m merger of Australia’s two largest online dating businesses.
How Accru can help you
Our services include:
- Reviewing customer and supplier contracts
- Researching industry trends
- Reviewing profit history and establishing its relationship to business cashflow
- Understanding why the vendor wants to sell
- Establishing if there is any history of industrial relations
- Establishing whether the vendor has been involved in any past or present legal disputes
- Reviewing supplier trading terms
- Understanding if the vendor has pledged assets as security outside of what is immediately apparent.
Engaging a due diligence specialist will give you the assurance you need when considering a business purchase. No matter how small the transaction, due diligence should be part of the process.
If you’re considering a business purchase, contact us now.