Due Diligence: What we do on your behalf
Strategic Fit Assessment
We start with intense discussions centered on a series of diagnostic questions that ultimately let us understand the questions that need to be answered, issues that need to be resolved and the full range of possible outcomes:
- How well does the transaction meet the investment criteria?
- Intimately understand the target company business and determine if it meets your strategic investment criteria
- Evaluate all aspects of the going forward strategy, giving special attention to the company position in the market and its ability to achieve desired business objectives, such as financial exits, revenue targets, and market share goals
- Compare and contrast alternative strategies to determine the best approaches for moving forward.
We provide answers to important questions, such as:
- What is the revenue and profitability potential for the target?
- Are the operating and financial projections realistic?
- Is the price right?
- What marketing strategies make the most sense?
- How much time and money is necessary to execute the strategies?
- Are the organizational resources and skills consistent with the investment candidate being considering?
Financial Health Assessment
We assess the financial health of the company based on its financial statements and accounting records. We determine the quality and reliability of financial statements and gain a sense of contingencies beyond the financial statements.
Our team members have in-depth knowledge of the "best practices" and techniques available for financial and accounting due diligence investigations, allowing us to:
- Assess the overall financial health of the target company and its future financial prospects
- Identify questionable practices, such as early recognition of revenue, recording revenues that are not genuine or are reversible, increasing income with a one time gain, shifting expenses to a later period, shifting income to a later period, and failing to record and disclose all liabilities
- Investigate questionable transactions such as complex business arrangements that are not well understood or financial results that appear to be "too good to be true."
We provide answers to important questions, such as:
- How accurate and reliable are the financial statements? Have they engaged in any accounting irregularities or use accounting policies to "spin" their financial statements?
- What is the quality of recurring cash flows?
- What is the quality of the target company's assets?
- Are there any unknown liabilities that could be deal breakers?
- What is the quality and reliability of future financial projections and what are the assumptions?
- What does the financial picture look like under "what if" scenarios?
Technology Assessment
We look under the covers and determine the real value of underlying technology:
- We conduct a comprehensive strengths and weaknesses analysis of the targets products, competitive positioning, and organizational capabilities
- Is the product unique in the market or one of many similar products? How easily can the product be replicated?
- Are competitors working on competitive offerings, and, if so, when are they likely to come to market? Are technology trends or developments evolving that may make it extremely difficult for product or technology to succeed?
- Will the technology scale, or will it stop working, or experience serious problems when transaction levels increase?
- How much time and money is necessary to meet technical goals?