Due diligence explained

Due diligence literally means 'reasonable care'. Huh? Indeed, quite vague. Fortunately, it has a more specific meaning in the context of mergers and acquisitions.

So what precisely takes place during a due diligence investigation? In the case of an acquisition, the buyer needs to have correct information: especially concerning the risks and the opportunities attached to the company being acquired. A company auditor such as BB3 Revisoren can perform such a due diligence investigation.

A due diligence investigation is desirable in the case of just about every important investment decision. Buyers then use the elements of the investigation as a realistic basis on which to negotiate the terms and conditions of the transaction. Furthermore, it prevents unwelcome surprises down the road. Examples include deferred obligations such as claims.

In short: a due diligence investigation provides the purchasing party with a detailed picture of the company being acquired. The auditor handling the due diligence investigation describes the company's strengths and weaknesses. Also formulated are attention points for the period following acquisition.

For the rest, there is no standard approach to due diligence. Certainly not at BB3 Revisoren. We always take account of the unique aspects of your organisation such as its specific strategic and financial objectives.