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Red-flag and selective-focus due diligence

For cases in which you do not require full-scope due diligence for time or efficiency reasons, we offer two options for meeting this requirement in the form of red-flag or selective-focus due diligence.

Do you want to rule out that possible deal breakers exist in a proposed transaction ahead of time? Red-flag due diligence gives you this assurance. We offer you a timely and independent insight into whether major obstacles threaten the progress of the transaction process.

In the following, you will find a representative selection of deal breakers, or findings that can have a pronounced effect in terms of reducing the purchase price at this early stage of the transaction:

  • Risk-fraught off-balance sheet financial instruments
  • Insufficient or missing provisions
  • Stressed liquidity situation which threatens the continued existence of the company
  • Unrealistic planning assumptions
  • Overvaluation of assets
  • Loss of orders and sales due to expiring contracts or product life cycles

Do you have tangible ideas on which individual aspects of the target company should be investigated? Our selective-focus due diligence focuses on certain areas based on your needs, providing you with precise analysis of individual situations.

Possible investigation priorities can include:

  • Profitability at product/service level
  • Analysis of the short- or medium-term liquidity situation and determining the need for funding
  • Determination of net debt
  • Clean-up of past figures (such as EBITDA, EBIT) to determine the purchase price
  • Review of selected contracts from a commercial and tax perspective

With our expert knowledge, we offer you a timely and budget-oriented analysis, the results of which serve as a basis for decision-making. If you decide to move forward with the transaction process based on these findings, our evaluations

provide an excellent basis for carrying out full-scope due diligence.

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