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.
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:
Analysis of fixed assets, depreciation charge, realisable value;
An over view report on the financial status and outlook of the business embracing:
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
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.