Businesses involved in any acquistions or mergers will need to ensure that the financial information they hold is as accurate as possible, not only to prevent excessive payment for the organisation but to ensure corporate governance objectives are achieved.
Due diligence is in many ways a central part of the process of securing finance or floating on a public market. It is through this process that we validate your business - its past track record, the credentials of its existing owners, managers and directors, and the potential represented by its future plans. The process is also used to decide the price to pitch your shares at - and who to pitch the shares to.
Castle Ryce offers pre-commitment due diligence reviews which provide independent evaluations of the products, services, operations, financial reporting systems and controls and management of companies to which lenders or investors are contemplating providing funding.
The evaluation provides additional information to be considered before a firm financial commitment is made. As such, it is a helpful tool in making a more informed credit or investment decision. It also provides information which can be used in the crafting of the lending or investment instruments for the benefit of the of the lending or investment entities. Although the structure of each engagement is unique, projects typically focus on answering the following kinds of questions:
What Due Diligence involves
Due diligence involves a detailed investigation by us into your company and its plans. It involves us checking out:
- The business' structure - how it is owned and constituted and what changes will be necessary prior to taking the company to the market.
- The business' financial health, based on a detailed examination of past financial statements and an analysis of the existing asset base.
- The credibility of the business' owners, directors and senior managers - including validation of the career histories of all the main players in the business.
- The future potential of the business, reflected in the strengths of its products and the probability of earnings growth over the medium- to long-term.
- An assessment of the risk involved in your business, in terms of your markets, your strategy and likely future events.
- Your company's business plan, in terms of how realistic it is, how solid are the assumptions used and how well it conveys your business's potential.