Whether it’s multi-million or billion dollar merger of public companies or the stock/asset sale of a large or small a privately held company, a crucial part of the transaction is completion of “due diligence.”
Due diligence is about making sure that you really are buying what you think you are. It can be invaluable in uncovering defects which may be deal killers or at least require remediation before closing or a restructuring of the economics of the transaction. It can also be useful in gaining useful information about the overall strengths and weaknesses of the company that you will need once you are in charge of operating the business.
Without “due diligence,” a buyer may discover too late that the facilities require enormous capital expenditures to compensate for deferred maintenance. Perhaps the largest customer is very unhappy and in the process of moving its business to another company. The accounts receivable may be well past due and even uncollectible.
Due Diligence can takes months and be extremely costly. At LHP, its network professional including attorneys and CPAs provides cost-effective and reliable financial due diligence service by finding out:
? Security Interests and liens on the assets being purchased
? Unresolved pending or threatened litigation
? Financial health of the company, including collectability of accounts receivable
? Identification of the key assets essential to the continued operations of ongoing business being purchased
? Current employee benefits and policies
? Quality of relationships with customers, vendors, and suppliers
? Condition of equipment and Facilities
? Agreements among owners relevant to the purchase
? Saleability of Inventory