Merger and acquisition involve a transaction that involves a significant amount of due diligence by buyer and accountants. It is very essential to be prepared for the due diligence activities that a target company will encounter, the process can go smoothly and quickly, serving the best interests of both parties to the transaction. The below-mentioned summary is of the most significant legal and business due diligence activities that are connected with a typical M&A transaction.
The buyer of the target company will be concerned regarding the past financial statements and related financial metrics as well as the reason for the target projections of its future performances.
The concern regarding the financial matter will include:
The buyer will be very interested in the extent and quality of the target companies’ technology and intellectual property.
The due diligence will be targeted on the following areas of inquiry:
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one of the most time-consuming components of a due diligence inquiry is the review of all material contracts and commitments of the target company. Contracts and their categories are important to review and understand include the following:
Agreements imposing any restriction on the right or ability of the company to compete in any line of business in any geographic region with any other person.
The buyer will want to review a number of matters in order to understand the quality of the target company management and employee base including:
An overview of any litigation, arbitration or regulatory proceedings involving the target company is typically undertaken. The reviews will include the following:
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Anti-trust and regulatory scrutiny of acquisition has been increasing in recent years. the buyer will want to undertake the following activities in order to assess the antitrust or regulatory implication of a potential deal:
The buyer will want to analyses any potential environmental issues the target company may face the scope of which will depend on the nature of its business. when an environmental review is taken place, it may include some the factors mentioned below:
The target company is subject to and has to comply with all the regulatory requirements, including by reviewing some of the following:
The M & A transaction also include are prepared a comprehensive disclosure schedule addressing many of the key diligence topics described above, and identifying any exceptions to the company’s representations and warranties in the acquisition agreement. carefully preparing the disclosure schedule is extremely important for the company. The company may not typically revise and update the document a number of times before it is ready for delivery to the buyer.
M & A transaction typically involve a significant amount of due diligence by the buyer and buyer’s counsel and accountants. If you’re seeking for the advice of qualified Mergers and Acquisitions specialists or interested in understanding more about our M&A Advisory Service, then meet our experts at Farahat and co and We’d gladly meet you to discuss your specific situation and needs. Please contact us for more detailed information on Mergers and Acquisitions in UAE.