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Financial Due Diligence Service

Comprehensive buy-side and vendor due diligence services to mitigate M&A deal risks, negotiate better terms and conditions, and inform transaction pricing. Fast, flexible due diligence team with extensive resources and expertise.

Due Diligence London - Acumon

Acumon is a leading firm of Chartered Accountants. As registered auditors, we deliver comprehensive due diligence services designed to help you identify and manage transaction risks, secure improved deal terms, and make informed pricing decisions. Our due diligence expertise supports both acquirers and vendors throughout M&A transactions. For smaller businesses, we provide cost-effective due diligence solutions tailored to your budget and requirements.

Our Due Diligence (DD) Capability

  • Our due diligence team operates with agility and adaptability to meet tight transaction timelines.
  • We possess the necessary resources and specialist knowledge to efficiently deliver comprehensive due diligence analysis within your required timeframe.
  • As an expanding, full-service, mid-tier firm of Chartered Accountants with a team of 70 professionals, we combine comprehensive service capabilities with the responsiveness of a focused practice.

DD Risk Management

We assist in reducing your M&A financial risks through comprehensive evaluation of:

  • Corporate structures: Comprehensive analysis of corporate structures, including group companies, subsidiaries, joint ventures, and associated entities, assessing legal and commercial implications and identifying potential risks or complications
  • Employees: Detailed evaluation of employment arrangements, including employment contracts, pension obligations, share schemes, and key personnel dependencies, assessing employment costs and identifying potential liabilities
  • Debtors: Comprehensive analysis of trade debtors, receivables, and credit risk exposure, assessing the quality and collectability of receivables and identifying potential bad debt risks
  • Creditors: Detailed evaluation of trade creditors, payables, and supplier relationships, assessing payment terms, identifying potential liabilities, and evaluating supplier dependencies
  • Tax – using our in-depth in-house tax expertise, including a Chartered Tax Advisor: Comprehensive tax due diligence assessing tax compliance, identifying tax risks and exposures, and evaluating the availability of tax losses and reliefs
  • Financing arrangements: Detailed evaluation of existing financing arrangements, including bank facilities, loans, overdrafts, and other debt instruments, assessing financing terms and identifying potential restrictions or covenants
  • Cashflow: Comprehensive cashflow analysis including historical cashflow trends, working capital requirements, and cashflow forecasting, assessing cash generation and identifying cashflow risks
  • Forecasts: Detailed evaluation of financial forecasts, budgets, and projections, assessing the reasonableness of assumptions and evaluating the achievability of forecast performance
  • Operations: Comprehensive evaluation of operational processes, systems, and efficiency, assessing operational risks and identifying improvement opportunities
  • Strategic issues: Evaluation of strategic positioning, competitive dynamics, and market opportunities, assessing strategic risks and identifying growth opportunities

Real World Due Diligence Expertise

Our understanding of acquisition transactions extends beyond advisory work – we have direct experience as acquirers, having completed multiple successful acquisitions ourselves. This hands-on experience provides unique insights into the practical challenges of transactions. Our Partner, Stuart Thomson, brings additional depth:

  • Previously served as a principal in private equity, providing direct experience in deal execution and portfolio management.
  • Has provided advisory services on significant infrastructure transactions, including hospital PFI projects, the debt restructuring of Croydon Tramlink, and the privatisation of the National Air Traffic Control System (NATS).

This real-world transaction experience, combined with our firm's own acquisition experience, provides our due diligence service with unique insights that enable us to identify risks and opportunities that may be missed by firms with only advisory experience. Our hands-on experience enables us to provide more relevant, practical due diligence advice that reflects the realities of transaction execution and post-acquisition integration.

Next Step

Get in touch with our team to discover how our due diligence services will help reduce your risks and secure more favourable transaction terms. Our experienced professionals will deliver comprehensive due diligence analysis tailored to your transaction, enabling informed decision-making and effective negotiation.

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*Acumon is positioned among the leading UK accountancy firms, having been only £37k short of the top 100 in the Accountancy Age 50+50 list for 2024. Since publication, there have been significant market consolidations; Acumon has continued to grow organically and through strategic acquisitions. Our substantial client base and PIE audit license demonstrate our capability and market position.

How Due Diligence Works

Understanding the due diligence process helps you prepare for M&A transactions and identify potential risks and opportunities.

  1. 1
    Initial scoping and planning
    Define the scope of due diligence based on transaction size, complexity, and specific risk areas. This includes determining which areas to investigate (financial, tax, legal, operational), setting timelines, and assembling the due diligence team. Early scoping helps ensure comprehensive coverage while managing costs and timelines effectively.
  2. 2
    Information request and data gathering
    Request and gather all relevant documentation including financial statements, tax returns, contracts, employment records, corporate structure documents, and operational data. Organise information in a secure data room and ensure all parties have appropriate access. Efficient data gathering is crucial for timely completion of due diligence.
  3. 3
    Financial analysis and review
    Conduct comprehensive financial analysis including review of historical financial performance, quality of earnings, working capital analysis, debt and creditor review, and assessment of financial projections. Identify any financial risks, unusual transactions, or areas requiring further investigation. Our team uses advanced analytical techniques to uncover potential issues.
  4. 4
    Tax due diligence
    Perform detailed tax due diligence using our in-house Chartered Tax Advisor expertise. This includes reviewing tax compliance, identifying tax risks and exposures, assessing availability of tax losses and reliefs, evaluating tax-efficient structures, and identifying potential tax liabilities. Comprehensive tax analysis is critical for accurate transaction pricing.
  5. 5
    Risk identification and assessment
    Identify and assess risks across all areas including corporate structures, employment arrangements, creditor and debtor positions, operational risks, and regulatory compliance. Evaluate the materiality of identified risks and their potential impact on transaction value and terms. Risk assessment informs negotiation strategy and deal structuring.
  6. 6
    Reporting and recommendations
    Prepare comprehensive due diligence report detailing findings, identified risks, recommendations for risk mitigation, and potential impact on transaction terms and pricing. Present findings to stakeholders and support negotiation of deal terms. Clear reporting enables informed decision-making and effective risk management.

Frequently Asked Questions

Financial due diligence is a comprehensive review of a target company's financial position, performance, and prospects conducted before an M&A transaction. It involves analysing financial statements, assessing quality of earnings, reviewing working capital, evaluating debt and creditor positions, and identifying financial risks. The purpose is to inform transaction pricing, identify risks, and support negotiation of deal terms. Our due diligence team provides fast, flexible, and comprehensive analysis tailored to your transaction needs.

Buy-side due diligence is conducted by the acquirer to assess the target company and identify risks before completing the transaction. Vendor due diligence is conducted by the seller to identify and address potential issues early, potentially improving deal terms and reducing transaction risk. Both types help inform pricing and deal structure, but from different perspectives. We provide both buy-side and vendor due diligence services.

Due diligence timelines vary depending on transaction size, complexity, and scope. A typical due diligence process takes 4-8 weeks, though this can be accelerated for urgent transactions or extended for complex deals. Our agile due diligence team works efficiently to meet tight timelines while ensuring comprehensive analysis. We can provide reduced-cost due diligence options for smaller businesses with faster turnaround times.

Due diligence typically covers financial analysis, tax review, corporate structure assessment, employment arrangements, creditor and debtor analysis, operational review, and regulatory compliance. The scope is tailored to each transaction based on size, complexity, and specific risk areas. Our comprehensive approach ensures all material risks are identified and assessed.

Due diligence costs vary based on transaction size, complexity, scope, and timeline. We provide transparent pricing and can offer reduced-cost due diligence options for smaller businesses. Costs are typically structured as fixed fees based on agreed scope, though additional work may incur extra charges. Contact us for a tailored quote based on your specific transaction requirements.

Yes, comprehensive due diligence provides valuable information that can support negotiation of better deal terms and pricing. Identified risks can be used to negotiate price adjustments, warranty and indemnity terms, or specific protections. Vendor due diligence can help address issues early, potentially improving deal terms. Our due diligence reports provide clear findings and recommendations to support effective negotiation.

Next steps

Get in touch with our due diligence team to discuss your M&A transaction requirements. Our experienced team will provide expert due diligence services tailored to your deal.

Contact Us for Due Diligence