Financial due diligence (buy side)

Any organisation considering a deal needs to test all the assumptions it is making about that deal. Financial due diligence provides peace of mind to both corporate and financial buyers, by analysing and validating all the financial, commercial, operational and strategic assumptions being made. It uses past trading experience to form a view of the future and confirms that there are no 'black holes'.

The components of the service may include revenue due diligence, synergy validation, maintainable earnings and future cash flows.

If this is your situation

• You want to strengthen your company’s core business by acquiring a company selling rival products that are almost identical in function/performance to your own.
• You need to build on your company’s existing activities by purchasing a company that sells/manufactures complementary products.
• You want to purchase a company to gain access to its existing products in new markets, or to increase your customer base.
• You need to expand your company’s current portfolio of products and services by acquiring new ones - potentially to provide a hedge against movement on the markets in which the company operates.
• You want to spread your company’s market risk by purchasing a company providing similar products or services in another country.

How PwC can help you

• We can enhance your understanding of the target business and therefore increase the likelihood that the deal will achieve its objectives.
• We can help you to identify and understand critical success factors and therefore improve your understanding of all the relevant issues so that decisions can be made on an informed basis.
• We can highlight strengths that can be built upon or weaknesses that need resolving.
• We can challenge (deal breakers) or validate the target's historic financials and forecasts.
• We can identify the real sources of profit and cash flow, assess their sustainability and underlying free cash, and confirm the value drivers.
• We can define cost savings and revenue enhancements by focusing on the available synergies and quantifying what is achievable.
• We can set projections by reviewing the feasibility of the business plan and prospects.