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Due diligence refers to the process of researching and analyzing completed before an acquisition, investment or business partnership in order to determine the value of the subject for due diligence or whether there are any major issues or potential issues. All the necessary information should be obtained by the prospective acquirer / investor within the predetermined time and make sure that a person makes a good deal and not a costly mistake. Our dedicated transaction advisory and due diligence team will assist you with financial, tax due diligence and business analysis that are contemplating investments, strategic partnerships, mergers and acquisitions or that are looking to enhance organizational effectiveness in an existing business unit or portfolio company.
We can assist you with:
- Financial due diligence: where in we evaluate the proposed deal by analyzing the present and historical financial statements including important agreements reviewing the controlled environment and risk assessment incidental to the business.
- Tax due diligence: where companies acquire a business, dispose a non-core business or gets merged and require to manage the tax risk. We can provide you with corporate tax, direct and indirect taxes due diligence while focusing on risks (including quantifications) as well as opportunities.
We aim to clearly bring out, in our due diligence review reports, the outcome of the engagement supported by findings in each area along with adjustments proposed to achieve the objectives of the engagement which is an integral component of their decision-making and negotiation processes.
FAQs
Due diligence refers to the process of researching and analyzing completed before an acquisition, investment or business partnership to determine the value of the subject for due diligence or whether there are any major issues. All the necessary information should be obtained by the prospective investor within the predetermined time and make sure that a person makes a good deal and does not a costly mistake.
Due diligence can be classified into various types. Broadly, due diligence, from the perspective of who actually carries out it, can be classified as follows:
- Buyer due diligence: It is carried out by the acquirer who is interested to get a better insight into the exposures of the target.
- Vendor due diligence: It is carried out by the management of the target company to attract more acquirers. The prospective acquirers rely on the vendor due diligence report to make their investment decision.
On the other hand, from the functional perspective, due diligence can be classified as follows:
- Financial and tax due diligence
- Commercial due diligence
- Legal due diligence
- Technical due diligence
- Environmental due diligence
- Human resource due diligence
We evaluate the proposed deal in financial due diligence by analyzing the present and historical financial statements, including important agreements reviewing the controlled environment and risk assessment incidental to the business.
- Information on the finances of the company
- Information about the company’s employees.
- Information on the assets of the company.
- Information on partners, suppliers, and customers.
- Legal information about the company.
In tax due diligence, companies acquire a business, dispose of a non-core business, or get merged and require managing the tax risk. We can provide you with corporate tax, direct and indirect taxes due diligence while focusing on risks.
The important findings of a tax due diligence helps buyer to make important decisions such as:
- The buyer can make better purchase decisions
- The buyer obtains sufficient supports to negotiate the deal price and transaction documents
- The buyer determines an appropriate deal structure
- The buyer expresses and chalks out deal-specific representations, indemnities, and other agreement terms
- The due diligence gives a superficial understanding of the target company to the acquiring company. As a result of which the businesses may not always succeed.
- The workforce, the competencies and the work culture remain a mystery to the acquiring company which are quintessential to a smooth running.
- Due diligence is a process which is judgment driven and this can pose a risk.
- The process is not often smooth due to one major hurdle which is the availability of information.
- The target company is in a constant fear that the existing customers may leave due to the impending sale and these customers would not want any contact with them.
- The confidential nature of transactions also serves as an impediment.
At AJSH, we assist you with the financial, tax due diligence and business analysis that are contemplating investments, strategic partnerships, mergers and acquisitions or that are looking to enhance organizational effectiveness in an existing business unit.
