Why a due diligence review is essential in a business acquisition
An article in the September 2016 edition of Building magazine titled Bases Covered, Why a Due Diligence Review is essential in a business acquisition, discussed both why a due diligence review is essential for the acquirer and also the significant benefits to the seller of preparing for a review.
In the article James Phillipson, Founding Principal of Mastermind Solutions Inc. was quoted “I have, on many occasions, found sufficient evidence in the review process that resulted in my clients withdrawing from the deal. My findings convinced them of evidence of potential loss of their entire investment. In addition, there is often additional information that warrants an adjustment to the purchase price and the terms in the letter of intent”
A Due Diligence Review is essential but should be undertaken by an experienced professional
Allowing this review to be undertaken by a professional with tons of finance experience is a valuable insurance policy for any business person. On both the buy or sell side there is huge benefit to a DDR by the buyer, or preparing for one by the purchaser. The article concludes “A DDR is an essential part of the process in acquiring a business. A professional reviewer will always find issues by digging through the records and using their business experience. The result of the review will impact the purchaser by providing information to be used in finalizing the acquisition and facilitating a smooth transition and mitigating risk.”
James can assist businesses by undertaking a due diligence review prior to the completion of an acquisition. For more sage advice from James, contact him at 905-731-8255 or James@MastermindSolutions.ca
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