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Financial Due Diligence

We most frequently provide financial due diligence to clients during corporate acquisitions, the sale of an enterprise, a majority capital purchase by an investor or on the provision of a loan.

How can financial due diligence help your client? 

Due diligence is a comprehensive financial review that ASB most frequently performs for the buyer before the acquisition of a company. Its aim is to assess the financial risks, analyse and interpret the financial data about the company being purchased and thereby assist in its investment decision and in negotiations with the counterparty. An owner who wants to sell his company can request the same audit from us (“vendor due diligence”). Due diligence thereby helps to solve the main problems before the start of the sales process. In large transactions such review is standard, but our experience shows that owners of small and medium enterprises often underestimate this area and the result can be a very unpleasant surprise during the sale process.

How long does such check take and what is the output from it?

Each check is unique and the time demands are determined in accordance with the brief from the client, the preparedness of the target company and data availability. The output of our work is a transparent final report summarising the financial data that the client uses when drafting its bid, and the key risks, including a proposal on how to deal with them (e.g. by reducing the purchase price or a guarantee in the purchase contract). During my career I have participated in dozens of due diligence reviews and I am able to define the assignment and its output for a client in such a way that it best suits the transaction in question.

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This service can comprise the following points

  • Detailed analysis of assets and liabilities and the results of financial management
  • Identification of one-off and extraordinary items that have influenced the financial management of the target company
  • Analysis of financial risks
  • Preparation of the mechanism for adjusting the purchase price depending on due diligence findings
  • Support in dealings with the counterparty
Partner
Tomáš Novák

“The main aim of due diligence is to assess financial risks and help the investor with the investment decision.”

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