Financial Due Diligence
Financial due diligence is a crucial assessment of the financial health of a business. The company’s historical and current financial performance is put under the microscope in order to establish future forecasts and identify any potential risks. The financial due diligence process also involves analysis of major customer accounts, fixed and variable cost analysis, analysis of profit margins, and examination of internal control procedures. At KSG our financial due diligence checklist covers everything you need to prepare or review (depending on whether you’re sell or buy-side) during an M&A deal.
Our Financial Due Diligence includes:
- Examining historical financial statements and related financial metrics
- Assessing company’s sustainable economic earnings
- Review of historical sales and operating expense trends
- Examining Free Cash Flow & working capital position
- Review of key assumptions used in management’s forecast
- Qualitative observations regarding internal control structure & accounting information systems
Tax Due Diligence
The acquisition, disposition, or restructuring of a business can create significant opportunities, as well as significant tax exposure. Both companies and individuals must confront numerous and complex tax issues, engaging with tax specialists at an early stage will allow you to factor in tax risks at the negotiation phase. KSG tax transaction specialists have vast expertise in all areas of tax, including corporation tax, VAT, customs and games duties, employment taxes and stamp taxes. The focus of tax due diligence is on historical compliance and the identifying and quantifying tax exposures.
Our Tax Due Diligence services include:
- Assessment of entity historical Tax compliance and review the tax filings
- Identify any material tax exposures that may be residing with the target.
- Identify historical risks or potential future tax costs
- Review proposed pre-sale/buy transactions for potential tax exposure or risk
- Review of past or pending tax audits of the company
- Structuring the deal in a tax-efficient manner
Legal Due Diligence
A crucial stage of any M&A transaction, an Legal Due Diligence is essentially a legal review of documents and information on the Target Company or assets. An investor must know beforehand the legal and regulatory risks and liabilities associated with acquiring a target company or purchasing assets in the UAE. Our KSG Legal Team is well equipped to analyse, assess, and describe those risks and would recommend mitigating measures to be implemented
Our Legal Due Diligence services include:
- Assess the rights, dues, obligations and liabilities of the target under its contracts
- Identification of liability, potential liability or deficiency in the target
- Validate the representation made by the seller at the time of pre-deal negotiations
- Validate the assumptions made by the buyer in valuing the target
- Identify any material legal exposures that may be residing with the target
- Investigation of the target company’s current and pre-existing obligations
Operational Due Diligence
Our operational due diligence assistance focuses on operating cost and capital expenditure and involves analyses of historical and current operating performance (processes) of the Target Company as well as identification of potential synergies that might be achieved as a result of the considered transaction. Our analysis supports the identification of operating bottlenecks, the assessment of the capability of current and planned operations to support the target’s projected volumes and the evaluation of potential capital expenditure requirements.
Our Operational Due Diligence services include:
- Analysis of operating costs and cost reduction programmes included in the forecast
- Assessment of operational capacities
- Review of performance against industry standards of the target
- Identifying and assessing potential upsides and bottlenecks
- Modelling of operating costs and cap-ex under different scenarios.
Post-Merger Integration
Corporate and private equity buyers must address integration issues quickly and early on the transaction in order to realise full value of the investment. Our KSG advisory service relates to multidisciplinary assistance to help you generate increased value from the deal. We help to integrate new business while preserving “business as usual” performance. We would also benefit from the understanding of the business gained during due diligence process in order to best determine post-merger approach.
Our Post-Merger Integration services include:
- Development of integration strategy and priorities
- Understanding of revenue and cost synergy potential
- Preparation for ‘Day One’ of the effective take-over of the target
- Identification and realisation of ‘quick wins’
- Identification, prioritisation and tackling of post completion issues
- Integration and synergy capture planning and execution
- Integration Management Office (IMO) mobilization
