The due diligence of the company is a process of collecting and analyzing information about the company, which is intended to help the investor decide to buy or acquire or give the company the image needed for transformation, e.g. merger.
"The due diligence service is now, in the era of a rapidly changing market, a particularly desirable value," says Dr. Andrzej Dmowski, partner of Russell Bedford Poland, legally securing transactions of the biggest players on the market. – Specialists in this area advise and pay attention to important points, as well as to nuances, which may affect the process of buying, selling, mergers or acquisitions.
Due diligence protects against an error, reducing the risks associated with the different activities of the company. Compliance with labour, tax or accounting standards is checked.
The audit team shall draw up a checklist to determine the direction of the study. They may include:
- review and audit of financial statements,
- Cash flow analysis,
- checking company debt and possible tax arrears,
- verification of subcontractors, partners and counterparties,
- the accounting effects of the transaction,
In merger processes, it may be useful to assess the synergy effect (surplus values of merged companies over the sum of these companies' values as separate entities).
Depending on the purpose of the audit, due diligence will take on different forms, always individualized in terms of customer needs.
In the field of mergers and acquisitions, we propose, among other things:
- management of restructuring processes within capital groups in financial and accounting areas (including merger or liquidation processes);
- studies and due diligence reviews accompanying merger and acquisition transactions;
- decommissioning reports (opening and closing the liquidation).