Due Diligence Review

Benefit:

  • Allows a business buyer to make a more informed decision based on the risks, price and potential of the organization under consideration
  • Creates a picture of the strengths, weaknesses, opportunities and threats of an organization from a financial viewpoint
  • Provides third-party, objective expertise and information to assess a prospective acquisition’s fit with a buyer’s goals and organization

Who’s most likely to benefit:

Organizations or individuals considering a merger with or acquisition of another organization.

Description:

After letters of intent about the acquisition have been reached, a prospective buyer typically has a limited period of time in which to perform due diligence before closing the transaction. A buyer conducts thorough research into the target company’s financial and operational results to help establish an appropriate value, increase understanding of the asset to be purchased, and minimize potential risks and “after-the-purchase” surprises. The buyer identifies specific areas targeted for further in-depth scrutiny by AGH auditors, such as inventory, cash, or accounts payable.

Experienced AGH review team members then delve into those specific aspects of the target company’s business during due diligence.

The due diligence report may be used as a way to further refine price or terms of the purchase, or simply as a decision-making tool to help the buyer transition the acquisition’s ownership and/or management. Either way, the buyer will have a clearer picture of the organization under the microscope after a thorough due diligence review.