Due Diligence – Part 3 – What’s in the box?

Assets usually form the foundations of any business valuation. However, an acquirer’s view of assets can be very different from that of the business for sale. As the saying goes, one man’s trash is another man’s treasure… and vice versa.

Within the due diligence process Acquirers and their advisors will look at the tangible and intangible assets of the company they plan to buy. 

They will want to understand:

  • What does the business own, and how long will that be suitable?
  • What investment will the business require in order to deliver the acquirer’s strategic objectives, and when?
  • How well protected are the business’ assets, especially intangible assets such as relationships, intellectual property and market position?

Answering these questions requires the acquirer to look in detail at what the business has. This could include stock, licences, planning consents and conditions, patents, trademarks, debtor and creditor data, operational processes and more.

They may also look at relationships with banks, landlords, customers, suppliers, key employees and other relevant stakeholders such as local councils, trade bodies and industry regulators.

If you are considering how you will exit your business, or you are considering a major investment, it is a good idea to look at your business as if you were acquiring it.

To find out more about how an acquirer might view your business and what you can do to maximise its value, join us at an Evolution CBS Masterclass.

 

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