Due diligence

The acquisition and disposal of a business or its shares involves both opportunities and risks. The buyer of a potential target company is often not sufficiently informed about its economic situation. However, the buyer must gain a thorough understanding of the target company in order to establish its purchase price, obtain financing from third parties and determine its future positioning and integration. Due diligence helps gain such understanding and forms therefore an important basis for a successful transaction.

You profit from our services not only as a potential buyer – sellers can also gain a competitive edge in the transaction process. In this regard, we offer e.g. vendor due diligence as well as the preparation of a fact book or further marketing instruments as part of a professional bidding process.

Our seasoned transaction experts provide highly qualified advice on all relevant matters, prepare the key information for all stakeholders and, in doing so, help you save valuable time. In this way and whether you are a buyer or seller – we create the basis for successful negotiations.

The special strengths of our approach to transaction consulting

Every transaction is different. Despite our standards, we consider the individual consideration of the specific aspects of a target company and the transaction itself as a critical success factor for your project. This applies equally to both institutional and strategic investors. Together with you, we develop tailored, if necessary tiered, examinations which, through their focus on the most significant aspects, lead to a reduction in time and costs. The start can frequently be initiated by a so-called “red flag due diligence” that focuses on the identification of so-called deal breakers and allows for the selection of further due diligence areas.

We provide due diligence support from a single source. We work in interdisciplinary teams (e.g. financial, tax and legal) both at home and abroad from our wholly-owned offices. Our due diligence projects are always managed by an experienced professional who is also your regular point of contact.

In all analyses, the focus is on acquiring transaction-relevant data for the business valuation, for negotiations concerning the acquisition agreement, especially the purchase price, for financial planning and, if necessary, also for a purchase price allocation as well as possible integration. Our aim to always provide you with tailored analyses leads to individual assignments, from the review of partial aspects to all-encompassing projects.

We offer you our assistance in conducting the following types of due diligence:

Financial due diligence »
Tax due diligence »
Legal due diligence »
Commercial due diligence »
Real estate due diligence »
Other due diligence areas »

Financial due diligence

An effective financial due diligence comprises most often the following points:

Identification of critical success factors for future development, in particular the analysis of sales and performance factors as well as cost components
Determination of normalised earnings from operations (EBIT / EBITDA) through the elimination of extraordinary occurrences
Derivation of working capital, cash flows, etc.
Examination of financing structures and identification of debts and similar items
Critical assessment of financial forecast and derivation of relevant financial scenarios

At your request and based on the results of the due diligence, we determine an indicative value for the target company.

Tax due diligence

We analyse and assess tax risks associated with the target company that may lead to financial obligations to fiscal authorities and check whether sufficient provisions were made to account for such risks. Our analyses provide information relevant to the calculation of the purchase price and the structuring of the acquisition agreement (guarantees, exemptions etc.).

We determine the current tax status of your target company, identify its specific tax risks and provide advice on how to optimally structure your contemplated transaction.

Legal due diligence

The goal of legal due diligence is to examine the legal risks and opportunities of a transaction and to present solutions for addressing the identified risks. At your request, we can also assist you in eliminating those risks. The focus of legal due diligence is, in particular, the examination of the overall corporate structure of one or more target companies, including the formation process up until its present structure, the status, enforceability and sustainability of the key operating assets and the contractual relationships. Furthermore, legal due diligence sheds light on the target company's employment and collective bargaining situation, industrial property rights as well as permits and disputes under public law.

At your request, we also support you in contracts negotiations.

Commercial due diligence

We carry out a two-step analysis of the success prospects and the foundation of the future performance of the target company, in order to pinpoint both strategic and operational opportunities and risks.

The internal economic performance analysis concentrates on such business areas as input, output, tools/technologies, personnel, organisation and, if necessary, synergy potential. The external environmental analysis examines and evaluates the industry structure, market development and potential, competitive position and macroeconomic impact. More »

Real estate due diligence

Our real estate experts determine the value of real properties and/or conduct real property appraisals in order to provide cost and planning security. In this process, we evaluate identified structural damage and defects and estimate repair and maintenance costs as well as cost risks related to contaminated sites, hazardous building materials and further factors.

For more information please visit the website of GLS ImmoWert GmbH.

In addition, our attorneys at law handle all legal due diligence associated with real estate.