Financial due diligence

Helping you get the facts when you acquire a business

Financial due dilligence

The information to proceed

If you’re involved in a merger or acquisition, you’ll want to be sure you have a clear, detailed understanding of the true value and risks of the target business.

Through our due diligence work, we give you the insight you need to make informed decisions.

Thorough investigation

We help you find the answers to vital questions, such as:

  • How is the business performing?
  • What is the supply chain like?
  • How much debt does it have?
  • Are there any tax risks?
  • What is the management function?
  • Are there any previous or ongoing disputes?
  • How strong are the customer and supplier relationships?
  • What is the overall market like?
  • What types of risks are involved?
  • How realistic are the financial projections?

The questions we ask depend on the nature of the target business, and where we believe the potential risks lie.

At the end of the due diligence process, you’ll have an enhanced view of the potential risks and opportunities of your planned transaction. You’re ready to go ahead, armed with the facts.

Due Diligence Case Study - Simpson Travel

Background

Simpson Travel is a long-established, privately owned company with turnover of approximately £23m, specialising in luxury private villa rental and boutique hotels. They previously had a portfolio of Turkey, Greece, Corsica and Majorca but further acquisitions represented an opportunity for the company to diversify the offering in line with customer demand.

We carried out due diligence on one of the companies acquired in 2015, Dominique’s Villas, which features 120 properties across France. Post-acquisition the company continues to operate independently within Simpson Travel but 45 of the French properties have created a dedicated French programme for Simpson Travel.

How our services helped

We led the due diligence assignment in order to fully understand the acquisition target, having been asked to pay particular attention to the balance sheet, revenue recognition, latest management information and the working capital cycle (in view of the cyclical nature of the travel industry).

We worked with the shareholders of the target to understand the composition of the balance sheet and to gain assurance that all liabilities were fully accounted for. Our analysis of the working capital cycle identified the peak cash requirements of the company. As part of our written report we identified a number of additional recommendations and areas for further investigation pre-deal.

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