Due Diligence
In addition to strategic considerations, economic and legal factors play a pivotal role in corporate transactions. These elements ultimately determine if a deal is finalized, under what terms, and the purchase price involved. Companies are intricate and multifaceted entities. So, how can an outsider accurately evaluate the relevant framework conditions to decide whether to proceed with or decline a deal?
Every corporate transaction, whether it involves the purchase or sale of a company or a part of it, presents both opportunities and risks. A thorough analysis of the transaction is vital for informed decision-making. Due Diligence provides transparency and allows for an assessment of the company’s financial, legal, and tax positions. It also offers insights into the company's market and competitive standing.
For buyers, conducting due diligence before a transaction is a standard global practice, largely due to management's duty of care. Due Diligence reveals potential risks and validates the purchase price. Opportunities, such as synergies, can be identified, and critical aspects for the company's subsequent integration can be examined.
Sellers also ensure a safe and efficient transaction by supplying reliable sales documents, including a vendor due diligence report.
The challenge of Due Diligence lies in maintaining confidentiality of internal information while uncovering crucial issues, i.e., requested or submitted data must be thoroughly scrutinized and expertly evaluated. For confidentiality and unbiased evaluation of data, external consultants are often engaged in due diligence, who—depending on the audit's focus—should come from various specialized fields. Beyond the essential legal due diligence, which examines the legal aspects of the company, tax and financial Due Diligence should examine the company's tax, financial, and economic elements. Other forms of Due Diligence, such as commercial, technical, and environmental, should be conducted as needed to ensure all bases are covered.
RSM Ebner Stolz's Transaction Advisory Services team comprises experienced auditors, tax advisors, lawyers, and management consultants with deep expertise in corporate structures. Our multidisciplinary and seasoned teams offer an efficient and seamless Due Diligence process from a single source.
Through RSM—a global network of independent auditing and tax consulting firms—we have a strong and competent partner, enabling us to leverage the expertise of partner companies in over 120 countries for corporate transactions, particularly Due Diligence.
Our services at a glance
- Commercial Due Diligence
- Financial Due Diligence
- Legal Due Diligence
- Tax Due Diligence
- Vendor Due Diligence
- Factbooks
- Carve-out financial figures
- Preparation/analysis of closing financials
- ESG Due Dligence