Legal and Financial Due Diligence
Legal and financial due diligence are two separate processes that are typically conducted during a corporate restructuring transaction to assess the legal and financial risks associated with the target company.
Legal due diligence involves a comprehensive review of the target company's legal obligations, contracts, licenses, litigation history, and other legal matters. The purpose of legal due diligence is to identify any legal risks or liabilities that the acquiring company may assume as a result of the transaction. The legal due diligence process typically involves reviewing legal documents, conducting interviews with key personnel, and performing other investigations as necessary. Financial due diligence involves a thorough review of the target company's financial statements, accounting practices, tax history, and other financial matters. The purpose of financial due diligence is to assess the target company's financial health and identify any financial risks or liabilities that the acquiring company may assume as a result of the transaction. The financial due diligence process typically involves analyzing financial data, conducting interviews with key personnel, and performing other investigations as necessary.
Both legal and financial due diligence are critical components of the restructuring process, as they help the acquiring company make informed decisions about the risks and benefits of the transaction. The findings of legal and financial due diligence are typically documented in a due diligence report, which provides the acquiring company with a comprehensive overview of the target company's legal and financial risks and liabilities. The report helps the acquiring company negotiate deal terms and structure, and may also inform the decision to proceed with the transaction or walk away.
How we assist our clients in Legal and Financial Due Diligence :
We play a critical role in both legal and financial due diligence by providing expertise in accounting and financial matters.
Here are some of the ways in which help with legal and financial due diligence :
➔ Financial Analysis
We conduct a thorough financial analysis of the target company's financial statements, accounting practices, and other financial data. This analysis can help identify any financial risks or discrepancies, and ensure that financial information is accurate and reliable.
➔ Tax Analysis
We review the target company's tax history and identify any potential tax risks or liabilities. We also assess the potential tax benefits or savings associated with the transaction.
➔ Risk Assessment
We help identify and assess the potential legal and financial risks associated with the transaction. This can include reviewing contracts, leases, and other legal documents to identify potential liabilities, as well as assessing the target company's compliance with legal and regulatory requirements.
➔ Valuation
We help assess the value of the target company and determine whether the transaction is financially viable. This can involve analyzing financial projections, market trends, and other relevant factors to determine the potential return on investment.
➔ Due Diligence Report
We provide a comprehensive report on our findings from the legal and financial due diligence process. This report can help the acquiring company make informed decisions about the transaction and negotiate deal terms and structure.