; A Following a pleasant conversation with a good friend businessman, came to light this issue I consider important for all age groups interested in having knowledge of the companies who wish to acquire through a process of reestruccturación. Before it's always good to be beyond a researcher for the company to acquire may come to Pasic and assets that do not necessarily add up as we presented them the first time. And a strategic tool to conduct a proper investigation into what we know is actually the Due Diligence, here a brief but practical manual. I hope it will be useful.
What a Due Diligence?
is the effort to obtain in a short period of meaningful information, although generic, key business aspects of a company which has interest.
When do you need to be carried out?
This process takes place in the run up to the:
- full or partial acquisition of a business
- Stock Purchase
- bond issues and actions
- To penetrate in new business units
Why perform a DD?
- Help to confirm whether there is an opportunity to do business.
- helps avoid losses or to prevent future failures.
- Without proper "investigation", the risk increases considerably. Buying a business without adequate information, or half-truths, can lead to significant financial loss.
What are the objectives of a DD?
- Know the business as a company Started:
- understand and review why the business could be attractive
- evaluate and measure the potential in the future and sustain elements of their perspective.
- know the overall financial position, property, legal and taxation of the company.
How long?
Due to the efforts required for the process and the confidentiality of the information is recommendations made in 2 stages:
1) Short Review
2) Integral DD
This represents the opportunity to learn in a very short time a company from the information that is willing to provide. Besides visiting their facilities, meet their management and ask questions.
is feasible to complete this process in a few days, approximately 20 to 30 days.
- Set the scope appropriate to the nature of the investment.
- The level of access or openness that the CIA is willing to allow.
- From previous knowledge of the company A and the activity performed.
- There are no fixed rules, but it is critical to make good planning, with the participation of external consultants or specialists.
Short Review
allow
- quickly evaluate whether there is a business opportunity will allow
- not incur excessive costs of being an attractive business for the investor
- If there is a positive opportunity, this phase will develop a "letter of intent" after which the owner is more interested in giving detailed information of the company. DD
- identify fronts to be evaluated. Depend on the purpose of the DD.
- Identify the information required
- the company have the necessary information? (First sign)
- typical fronts:
- Background Documents
- corporate shareholders
- Information Financial Information
- employees, managers and directors
- industrial property, intellectual, etc.
- Company background.
- financial situation, financial and accounting information
- industry analysis, sales and operating ratios Contingency
- tax, labor and environmental
- Marketing, Quality and customer relationship
- HR and industrial relations. Key personal characteristics industrial technology and computer
- impression of the company.
Company ;
Company B - meant to sell - Intention to Buy
---------------> \u0026lt;------------------
- Business Strategy - reinforce strengths and weaknesses
cover - Meet real situation
- Maxim. Emp value. - Staying competitive
Eye important thing: top management must be involved in the four stages of the procurement process: planning, research, structuring the agreement and integration of the company to acquire.
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