Due diligence is a process of thorough and objective examination that is undertaken before corporate entities enter into major transactions such as mergers and acquisitions, issuing new stock or other securities, project finance, securitization, etc. One of the key objectives of due diligence is to minimize, to the maximum extent practicable, the possibility of there being unknown liabilities or risks. The exercise is multi-dimensional and involves investigation into the business, tax, financial, accounting and legal aspects of an issuer.
The approach to due diligence depends on the type of transaction and what is intended to be achieved.
Due diligence may be of various types:
- Commercial due diligence – review of industry, market and business model of the issuer
- Reputational due diligence – review of credit worthiness and reputation of individual counterparties
- Financial due diligence- review of tax, financial position, policies and internal controls
- Legal due diligence – review of documentation to identify potential legal issues that may be risks / impediments to the transaction or in the general operations of the issuer, that may affect the value or consideration in connection with the transaction
At Midson Advisors, we provide all the above types of Due Diligence Services to our clients depending on the nature of the transaction and we offer an unbiased evaluation report of the findings. Incase required, we can also take the deal forward where the Valuation and other Detailing of the assignment can be done.