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| 1.Introduction | Download |
- What is due diligence? Ten key questions answered
- How we should expect due diligence to affect a transaction – a framework
- Suppliers
- Users (bank lenders, private equity firms and other providers of finance, as well as companies on behalf of their investors/shareholders)
- Legal status of diligence reports
- Due diligence from the target’s perspective; managing the subject of the investigation
- Who commissions and who pays
- Liability of due diligence providers
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| 2.Types of Due Diligence: A Brief Outline |
- Financial and commercial due diligence
- Employee/HR due diligence k
- Legal due diligence, contracts, leases and obligations
- Fixed assets due diligence
- Systems and IT due diligence
- Environmental due diligence
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| 3. Due diligence in the M&A timetable
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- M&A process overview
- Phasing: the various stages of information release
- The traditional process, with all buyers undertaking independent due diligence
- A process underpinned by vendor due diligence, prepared ahead of wider marketing
- The pros and cons of VDD
- Vendor assistance services: pre-sale preparation/cleaning up businesses pre-sale
- Smart preparation: Adding value through pre-transaction due diligence/pre-sale readiness review
- Interaction with other areas of information provision such as teaser, information memorandum, management presentations
- Co-ordinating due diligence finding and ensuring they are incorporated in the definitive agreements
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| 4.The main areas of due diligence |
- An overview of each area, reviewing the key areas of investigation and typical/potential findings including:
- Financial, including a detailed review and analysis of how financial due diligence is used to help determine final pricing (quality of earnings;normalisations and proformas;cash & debt free;net working capital analysis)
- Tax
- Legal
- Commercial
- Property
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| 5.Specialist areas of due diligence, to include, with examples:
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Certain transactions and targets call for a more specialised investigation into matters such as:
- Contracts
- Plant and equipment
- HR
- Market, commercial and strategic analysis
- Brand strength
- Customer referencing
- Information Technology
- Operational analysis. E.g: benchmarking
- Insurance
- Pensions
- Regulatory compliance
- Reputational enquiries
- People/psychometric/behavioural
- Patents/IP
- Competition risk
- Environmental
- Resources/reserves
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| 6.Steps of Due Diligence |
- Developing the right team
- Preparation of a checklist
- Collection of information
- Creation of Data room
- Review of documents
- Finalize reports and findings
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| 7.Acquisition of Data/Managing a Data Room |
- Role of a data room in due diligence
- Types of data rooms
- Physical data room vs. virtual data room
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| 8.Creating the Due Diligence Team |
- What is the right team?
- Composition of the team
- Delegation of the role and responsibilities of financial experts, business analysts, and legal professionals in the due diligence team
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| 9.How to Analyse the Received Information |
- How to collect the information?
- What kinds of information should be collected?
- How to analyze the company information?
- Review of the company’s competitors and industry
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| 10.Planning and Monitoring a Due Diligence Assignment |
- Importance of planning in due diligence
- Protocols for drafting a workable due diligence plan
- Naming the essential actions, targets, and deliverables
- Significance of continual assessment and assignment supervision
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| 11.How to Write Attractive Due Diligence Reports |
- Different types of reports
- How to organize your findings?
- Prevent the usual snags in business report writing
- Comprehending the components of an ideal due diligence report
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| 12.Due diligence in planning and implementation |
- Closing the deal is only the start – due diligence also has a role in planning for business combination and separation
- Operational analysis and improvement
- Synergies analysis, costs and benefits
- Integrating the target – post-deal planning
- Separation analysis – carve outs
- Discussion will include key areas of focus, examples of discoveries and potential risk areas
- Presentation of key findings
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| 13.How due diligence integrates with the definitive agreements and goes to value |
- Due diligence and price
- Finalising the equity bridge
- Locked box or completion accounts elements – net debt and working capital – different approaches to final pricing
- The legal framework – SPA and the disclosure letter
- Representations and warranties
- Retentions and escrows
- Limitations on the liability
- Disclosure issues
- Indemnities
- Example due diligence findings – and their impact on either price or legal agreements
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| 14.Capital markets transactions |
- Prospectus and sponsor’s role
- Long form report
- Working capital review
- Consultants’ reserve reports
- Statement of Benefits
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| Case studies and examples |
| 15.How to Decode the Due Diligence Report |
- Assimilation of data and interpretation of results
- Influence of due diligence on decision-making
- Accomplishment of the recommendations made during due diligence
- Incorporation of finding in keys documents
- Successful assimilation of reports to crucial management
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| 16.How to Undertake Startup Due Diligence |
- How to organize the startup DD
- How startups DD is different
- Things to focus on the DD
- Review of IPs, products, team, market, financial and capitalization
- How to plan the cost and time
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| 17. Mistakes to Avoid in Due Diligence |
- Common mistakes
- How to avoid such mistakes
- Impact of mistakes
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| 18. The course will include a range of case studies, both due diligence findings and their impact on the deal such as: |
- Financial due diligence
- Normalised EBITDA, cash and debt, working capital, unspent capex
- A detailed example equity bridge – linking to due diligence findings
- Potential legal discoveries
- Specialist retailer – commercial due diligence
- Other typical commercial findings
- Example tax discoveries
- A debate on property
- Environmental due diligence – waste management, petroleum, brownfield
- IP – due diligence on a new technology
- Locked box and completion accounts – worked examples
- Warranties, disclosure against those warranties and potential impact
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| 19. Conclusion |
- Relating costs to value
- Trends in due diligence
- The place of due diligence in your transactions
- Managing due diligence providers
- What buyers and other advisers should look out for
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