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Due diligence for investors and insolvency practitioners

Cost effective solution
Our team can obtain intelligence on any business and with authorisation, interrogate records and issue a due diligence report in as little as 48 hours.

Valuable information when you need it
The service is aimed at investors or companies buying distressed businesses as well as insolvency practitioners. There is usually little time to complete a deal but even at the right price there are increased risks which we can mitigate.

Process
We visit the target company, often at short notice, meet with available staff and prepare a detailed and up to the minute report on the company's status. We can normally identify risks such as exposure to HMRC investigation, "hidden" creditors, financed asset status and the accuracy of returns to HMRC, Companies House, the FSA and any other Authorities.

Our report will normally include:

An over view report on the financial status and outlook of the business embracing:

  • Analysis of fixed assets, depreciation charge, realisable value;
  • Review of trade debtors, recoverability, notes on disputed debts, retention status, negative balances;
  • Bank balances, overdraft facilities, renewal dates, security;
  • Review of trade creditors, personal/corporate guarantees, disputes, negative balances;
  • Directors loan accounts, security, tax disclosure and potential liabilities;
  • Review of VAT and PAYE status, including CIS, VAT schemes and payment plans;
  • Shareholder agreements, statutory review;
  • Investments, subsidiaries, related parties;
  • ProForma statement of affairs where there is potential insolvency; report on any existing CVA;
  • Outlook and business pipeline report;
  • Credit search status report

    Who can benefit?
  • Private equity and venture capital funds
  • Companies, business angels or individuals buying other businesses
  • Insolvency practitioners

    Case study
    TARGET: Private limited company with turnover £4m but making losses.
    OUR CLIENT: Profitable company with turnover £30m.
    TURNAROUND: 2.5 days
    MEETINGS: visits to Target, Client, Target's accountants, Insolvency firm

    Our client was considering acquiring the Target and asked us to review the status of the client and help them structure the acquisition.

    Our initial due diligence report revealed substantial PAYE liabilities and tax liabilities. There were personal guarantees by the directors in place for the bank and the company's main supplier, as well as an overdrawn directors' loan which was not properly split in the records between the directors.

    Had our client proceeded without our report it would have cost them at least £0.5m which they were not originally expecting. The company was clearly insolvent and we:

  • liaised with a well known firm of Insolvency practitioners to proceed with a liquidation
  • instructed a firm of solicitors on behalf of our client to prepare a sale purchase agreement
  • assisted with establishing a new business which acquired the old business from the liquidator
  • helped resolve the directors's loan account balances
  • assisted with the preparation of a statement of affairs
  • negotiated the purchase of fixed assets on site with the lease finance creditors
  • established full compliance with HMRC for the new business
  • set up a new accounting system
  • assisted with accounts staff recruitment
  • trained the new staff to deal with day to day accounting matters.

    Please contact us if you would like more information.

     



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