Due Diligence

Due diligence maps out the risks, examining potential financial, fiscal, pension-related, legal, operational or administrative risks. The fiscal experts at Grant Thornton also pay special attention to transfer pricing. This is an absolute necessity now that the rules for transfer pricing are increasingly stringent. Independent due diligence is advisable for both seller and buyer. After all, the selling party has a duty to report all essential information, while the buying party has to meet an inspection requirement.

The aim of due diligence is to obtain an understanding of a company’s risks, financial or otherwise. How are existing and future requirements constructed? How constant are the future earnings forecasts, how does the workcapital develop, what are the exact debts of the organisation on the transfer date and how do the historical results compare to the forecasts? 

Will the purchase eventually take place through the sale of shares or through the takeover of assets? Due diligence by Grant Thornton takes stock of and suggests solutions for the best possible merger structure and payment mechanisms (Cash/debt free of locked box). Due diligence reporting can also serve as an accountability instrument for financial institutions and investors.

Due diligence can also vary in intensity. Grant Thornton offers three options: a simple examination of the books (limited scope), a complete due diligence investigation (full scope), and a highly extensive due diligence investigation with transfer support (full scope + transaction support).

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