Due diligence is the most critical piece for completing any business transaction. At the same time, due diligence must be of high quality yet be timely and cost-efficient. Evans & Evans has been conducting this work with all types of organizations (i.e., funds, brokerages firms, large companies) for many years.
Some level of due diligence should be performed before entering into any business transaction or relationship. The depth of the due diligence may vary depending upon several factors including the nature of the transaction and the industry involved. However, due diligence is especially critical under the following circumstances:
- Taking on new clients
- Mergers & Acquisitions
- Public Offerings
- Forming a partnership
- New licensing agreements
- Commercial lending
Unfortunately, most due diligence is conducted too quickly or too narrowly, focusing on how a company has performed financially in the past. Evans & Evans widens the scope. We use a multi-disciplinary approach involving: (1) traditional financial due diligence; (2) management and personnel; (3) technology, service and products; and (4) markets and marketing plans.
Our comprehensive approach provides you with a due diligence report that examines your situation from multiple perspectives ensuring that you make informed decisions before entering into any business relationship.
Essential to an effective due diligence process is the method. In this regard, Evans & Evans uses a flexible proprietary methodology for carrying its due diligence. We divide our analysis traditionally into four essential areas:
- Technology, Services and Produces
- Management and Personnel
- Markets and Marketing Plans
- Financials and Financial Plans
A detailed scope of work is defined to meet client requirements and may include:
- A site visit.
- Data Compilation – history, previous investigation and information available.
- Review of current business, market and financial results and projections.
- Identification of areas of potential concern.
- Evaluation of goals and objectives.
- Product and/or service analysis, sampling and analysis.
- Market assessment, sampling and analysis.
- Evaluation of management and human resources.
- Evaluation of available resources, technologies and business and market plans.
- Direct assessments, opinions and conclusions.
- Estimates of cost for Business Plan execution.
- Statement of risks.
- Off balance sheet liabilities.
- Revenue and earnings patterns.
- Customer analysis.
- Major suppliers analysis.
- Gross and net margin analysis.
- Production/distribution analysis.
- Organization and compensation assessments.
- IT infrastructure assessment.
- Financial and management control evaluation.
The team at Evans & Evans is schooled and experienced in a wide variety of industries and sectors and is available to quickly and cost effectively become part of your due diligence team in effectively executing a business transaction.