Global Due Diligence

In order to execute a successful business decision in an unchartered territory, it’s important to understand your target area as best as you can. Are there any barriers to entry in terms of legal, financial or cultural? What do Human Resources look like? These are some of the many questions BNS can help you to answer.

Businesses, especially when entering into M&A deals, must conduct lengthy due diligence. As a global due diligence provider, we cannot overstate the importance of verifying the claims sellers make to safeguard your business.

When making international financial decisions, it’s even more critical to scrutinize financial contracts and transactions. Knowing the types of due diligence can help you manage risks and make smarter financial decisions as a business owner or leader.

1. Administrative. An essential part of due diligence that involves verifying operational costs, facility operations, workstations, occupancy rates and more. When pursuing an acquisition with the goal of expansion, this type of due diligence helps the buyer understand the full operational cost of expansion.
2. Asset. If assets are part of the transaction, it’s essential to conduct a full due diligence of the assets to understand their location, condition, lease or financing agreements and when assets were acquired. Everything from equipment to real estate must be outlined, located and verified.
3. Customer. Due diligence on customers must be performed to learn who the company’s top customers are, service agreements, credit policies, contracts and the reason for any significant customers leaving the company in recent years.
4. Environmental. In businesses that must adhere to environmental regulations, it’s crucial to have an analysis done to verify permits, licensing, disposal methods and protocols that help keep the company operating within government and state guidelines and regulations.
5. Financial. Perhaps the most critical form of due diligence is financial due diligence. When you conduct this form of due diligence, you’re auditing the seller’s financial statements, reviewing company projections, verifying creditors, checking inventory and much more. A complete financial analysis must be conducted to understand company debt, profit margins, cost analysis and more.
6. Human Resources. When acquiring talent, an analysis of total employees, salaries, bonuses, agreements, HR policies, benefits and insurance and more must be performed. HR analysis helps businesses understand what talent they’re acquiring and how each person benefits the team.
7. IP. Intellectual Property is a growing concern, as it enables businesses to monetize their intellectual property assets. Conduct a full review of patents (both acquired and pending), copyrights, trademarks, brand names and other information.
8. Legal. Scrutinizing legal documents is common, and this will include verifying and accessing Minutes of Board Meetings, share certificates, articles of association, guarantees, licensing or franchise agreements, loan documents and more.
9. Taxes. What are the tax liabilities of the company? It’s essential to verify any pending issues with tax authorities, understand and verify tax projections, and look over past tax returns. If a company has been audited, it’s also crucial to know and retrieve any information about the audits.

When proper global due diligence is performed, it provides invaluable insight into a business and its operations. Furthermore, it’s a method of verifying statements and reports to make smarter, more informed business decisions. Reach out today to learn more.