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When a proper due diligence has not been undertaken prior to making an investment, there are huge risks attached.​

From a financial perspective you may pay too high a price due to underestimating the integrity and quality of the business' financials or not deriving the most fair pro forma and normalised earnings figure.

You may not have yet considered whether the transaction will complete based on a Locked Box or a Completion Accounting mechanism. 

 

If you are without an advisor and the seller has more knowledge of you about his business and/or business deals generally, then it's almost guaranteed that you are highly disadvantaged and this can be very costly.

 

From a commercial perspective you may not be aware of certain players already existing in the market that you'd like to enter.

You will want to clearly understand the  supply and demand that already exists and how the Target business's products will compete in this space. 

What are the business' goals & objectives?

Will you want this to change after you invest in the business?

If so you may want to consider how much ownership interest you choose to buy. 

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From a legal perspective you may not be aware of outstanding claims and litigations against the company or other liabilities & obligations that could potentially be passed over to the buyer without an appropriate mechanism for being compensated by the seller.

No buyer would want to miss necessary clauses in the final sale & purchase agreement (SPA).

For example, clauses in relation to representations & warranties, and other conditions (such as non-compete clauses). 

Given these risks a potential investor could unintentionally leave large sums of money on the table without realising.

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As experienced due diligence advisors we can leverage our combined expertise and alliances to provide you with financial, commercial, and/or legal due diligence - whichever you require. We will ensure you are well equipped for the negotiations, SPA signing, completion mechanisms, and post-deal operations 

 

"Samuel & Sonz went over and above to provide us with great due diligence services when we were looking to buy a company. We saved thousands by using their due diligence services. Recommend using S&S again." - Business Owner, Hospitality Industry, QLD

Samuel & Sonz Business Valuation and Advisory Support Services

 

ABN 91 395 500 743
 

Australia Wide Service 

Level 29 Chifley Tower, 2 Chifley Square

Sydney, NSW, 2000, Australia

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