Due diligence
Knowing what you are buying (or selling).
Due diligence happens during a business acquisition to assess the credibility of a company. The process of due diligence carefully explores whether the business is worth the purchase price and what risks are involved in the proposed acquisition of the business. Due diligence consists of financial, tax, legal and economic aspects and provides a complete overview of all data and figures of a company. The due diligence process should not be underestimated.
In the buying and selling process,
there are two rules
In the buying and selling process, there are two rules. On the selling side, you have an obligation to provide information to the best of your ability. And, as a buyer, you must research all this information.
When we guide a sales process, we prepare an Information Request List (IRL) containing all the files from the selling party which the buyer will want to see. In this way, we ensure that a large part of the information is ready before the due diligence phase begins. We make sure that certain parts of the information remain confidential (blacklining), we sort the information in the right order and place it in a vault, or virtual data room, when due diligence starts. At the end of a due diligence process, all the information in the data room will ultimately be ‘disclosed’ information. In other words, the buyer cannot renege at a later stage on any information once it has been disclosed. This means that the buying party can never indicate that certain items should be settled afterwards.
Provide information and assess this to the best of your ability.
If we represent you as the buying party, we will draw up a list of information and files we want to see from the seller. We also engage a specialised third party to conduct due diligence. They will ask their own questions and report all their findings. We will go through this report in-depth with you and discuss all the important points. We offer advice on potential issues, and what looks good – or doesn’t. In this way, we guide you through the buying and selling process, always keeping your best interests in mind. Hogenhouck m&a has plenty of experience, and we know what topics are important in this phase. If due diligence shows that this is not a good deal for you, we will give you our honest opinion. Needless to say, you will always have the final say.
How long will the due diligence phase take?
The process takes about two months on average. In practice, however, this timeline very much depends on the situation. If all the information is available and communication is constructive, the process will be smoother and faster than if this is not the case. Based on our expertise and our relationship, we will try our best to complete the process as quickly and well as possible.
Our approach
We take the hassle out of the due diligence process for you, for example in the delivery of files. Ensuring that confidential information (such as GDPR and customer data) is blacklined, that all information is put in the right order and placed in the virtual data room, takes quite a lot of time. We go through each document so that only the necessary information is visible on the buying side.
The next step is an intensive process to get all the information in focus. As an entrepreneur, you may well be inundated with questions. We review these, filter out duplicate questions and answer them if the information is already available in the data room. We will only submit those questions to you for which we have no information yet. This method keeps things as relaxed as possible for you as a business owner, so that you can continue your daily business as much as possible. In other words: our approach saves you (a lot of) time.
What do we want to do for you?
‘Through the right figures, we can also bring the right facts to the table.’
Hein Stoops
A lot is happening in the m&a market.
Stay informed and subscribe to our newsletter.
