Due Diligence
Schenck’s due diligence process follows a highly analytical approach. Our process is designed to help you achieve the objectives of your acquisition by focusing on the key areas, identifying the potential risks, addressing the realities of the target business, and taking an objective point of view. We believe it is important to keep “the end in mind”--always focusing on your objectives and the areas that impact value. This allows you to focus on your business, doing the right deals and preserving the value of a successful transaction post-close.
Although every transaction is unique, a few of the many key areas we analyze that impact value and allow us to provide you with a comprehensive report include:
- Company background information, history, financial statements, transaction offering memorandums, structure, cash flows, financial controls, and customer trends
- Quality of earnings, by inquiring about accounting policies, differences between company accounting policies and US GAAP, and reserves activities, and analyzing monthly operating data
- Key business drivers, profitability trends and concentrations of risk (e.g., by customer, product line, geography, etc.)
- Historical and projected cash flows, including evaluating projections relative to historical performance and plan
- Working capital trends including accounts receivable, inventories and supplies, trade payables, accrued liabilities, and other current assets and liabilities
- Other assets and liabilities, including property, capital expenditures, employee benefits, off balance sheet items and significant capital and operating leases.
- Reading auditor workpapers, management letters other related information
- Advising on the purchase and sale agreement, including working capital mechanisms
- Assessing post-close adjustments and other purchase price mechanisms
- Performing tax due diligence and structuring
Our diligence work is conducted by experienced accounting and tax professionals who understand the buyer’s perspective. As a result, you get insightful analysis and the information you need to make the right investment decisions.
Contact our M&A team for more information about how our diligence services can help your next acquisition be a successful one.