Financial due diligence guides the big decisions

Ryan Bilsborough PM+M

As acquisitive businesses look to capitalise on potential opportunities in the M&A world, understanding the nuances of financial due diligence is vital.

After the outline terms of a transaction have been agreed, the typical next step for a buyer is to undertake a process known as financial due diligence.

This serves as a basis for the buyer’s decision-making regarding the viability of the transaction from that point onwards.

The process involves a series of requests, typically in the form of an extensive checklist or questionnaire from buyer to seller that, in essence, facilitates the examination of financial statements, cash flows and the assets and liabilities from which the former derive.

The main aims are to verify the initial assumptions made by the buyer regarding the transaction and potentially uncover hidden risks or discrepancies which may impact the viability of the deal.

Financial due diligence is labour intensive for both the acquirer and the vendor, and through the desire to progress the deal, sometimes known as ‘deal fever’, acquirers may be tempted to overlook potential red flags in pursuit of deal progression – potentially leading to costly oversights.

The outcome of financial due diligence provides an opportunity to clarify the initial assumptions underpinning the deal, or where required, revisit and potentially negotiate the transaction based on the true position of the target company.

Ultimately, financial due diligence is the cornerstone of acquirers’ decision making – providing comfort that acquirers, lenders, and advisers can confidently navigate the complexities of deal-making.

Enjoyed this? Read more from Ryan Bilsborough, PM+M

Latest news

1

Innovate Lancashire increases business engagement capacity to accelerate county’s innovation growth Natalie Wilson Hannah Churchman Trudi Waldram

Innovate Lancashire increases business engagement capacity to accelerate county’s innovation growth

18 Feb 2025

2

MP says the Lancashire and Cumbria Institute of Technology will be vital in meeting county’s housing needs Maya Ellis MP With Mark Taylor In The Engineering Department CREDIT Callum Pilkington

MP says the Lancashire and Cumbria Institute of Technology will be vital in meeting county’s housing needs

18 Feb 2025

3

Blackburn College lights up CyberFest with a focus on next-generation cybersecurity Umayr Mir talks a visitor through The BLIS Suite

Blackburn College lights up CyberFest with a focus on next-generation cybersecurity

17 Feb 2025

4

Delivering the Wright kind of care Eric Wright care

Delivering the Wright kind of care

17 Feb 2025

5

Historic hotel to get ‘significant investment’ Shard Riverside

Historic hotel to get ‘significant investment’

17 Feb 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Understanding & Preventing Sexual Harassment - Creating Safe & Respectful Workplaces
Supporting Women's Health in Your Teams A Path to Success-3.png.png
LBV Hub Webinar
21 Feb 2025 - 21 Feb 2025

Understanding & Preventing Sexual Harassment - Creating Safe & Respectful Workplaces

*, Online, *

12:30 - 13:30

Women's Health champion training
Supporting Women's Health in Your Teams A Path to Success-6.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Women's Health champion training

*, Online, *

10:00 - 16:00

Level 3 Emergency First Aid at Work Course - In Person
RKMS ACADEMY LOGO - BLACK AND ORANGE.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Level 3 Emergency First Aid at Work Course - In Person

RKMS Group , Blackpool, FY42DP

09:30 - 17:00

Employment Law, Tax and Payroll Update - East Lancashire
PM and M event
LBV Hub Seminars
26 Feb 2025 - 26 Feb 2025

Employment Law, Tax and Payroll Update - East Lancashire

Accrington Stanley Football Club, Accrington, BB5 5BX

08:00 - 10:00

Preston Freelancer Meet-Up: February
Freelancer Meet-Up Feb.png.png
LBV Hub Networking
26 Feb 2025 - 26 Feb 2025

Preston Freelancer Meet-Up: February

Society1 Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Better People Management Workshop
Business Breakfast.jpg.jpg
LBV Hub Seminars
26 Feb 2025 - 26 Feb 2025

Better People Management Workshop

The Jimmy Arnfield Suite Lancashire Football Association, The County Ground, Thurston Road, Leyland, PR25 2LF

10:00 - 15:30

StackedX with PM+M and CFO Techstack
LBV Hub Seminars
27 Feb 2025 - 27 Feb 2025

StackedX with PM+M and CFO Techstack

Red Hall Hotel, Bury, BL9 5NA

08:00 - 10:00

Better People Management Workshop
LBV Hub Seminars
27 Feb 2025 - 27 Feb 2025

Better People Management Workshop

Pendle Town Hall, Market Street, Nelson, BB9 7LJ

10:00 - 15:30

Kickstart Networking - Crazy Golf at Level, Preston
Kickstart Crazy Golf.png.png
LBV Hub Networking
27 Feb 2025 - 27 Feb 2025

Kickstart Networking - Crazy Golf at Level, Preston

Level, Preston, PR1 1HT

16:00 - 18:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV120 Online Graphic 1
Subscribe now

Weekly news bulletin