Due Diligence – Digging to the core

Let him who commits himself be tested – the goals of due diligence

Let him who commits himself (eternally) be tested (Schiller) – this is probably also true if you want to acquire a stake in a company. Even if the time horizon is not eternity. The scope and focus of this due diligence (DD) must be decided on a case-by-case basis. The goals and plans of the buyer play just as important a role as the transparency that the seller has created with documents already submitted. The focus can then be on the financial situation (Financial DD, or FDD), the market and competitive situation (Commercial DD, or CDD), legal issues (Legal DD, or LDD) or performance management (Operational DD, or ODD).

A complex service from a single source

Together with the experts from Warth & Klein Grant Thornton’s international network, we can offer a wide range of due diligence services from a single source. One contact person takes over project management, coordinates the activities of the individual experts and ensures efficient communication.

This efficient approach in the interest of the client saves time through centralized management of the interfaces. Effects of the findings of the different sub-DDs on each other are systematically taken into account in the integration of the results.

In this context, the experts of Hanse Consulting are primarily responsible for the issues within the scope of ODD and CDD.

Operational DD – when inner values are particularly important

The core of the service in ODD is the operational assessment of the processes and structures of the target company in order to evaluate risks and opportunities. All areas and functions of a company can be examined, from sales, purchasing and production to logistics and research and development. For strategic investors in particular, ODD ensures that synergy potentials are quantified by a neutral third party in order to arrive at a realistic assessment. For financial investors, improvement potential can be identified before the transaction, which can then be consistently leveraged after the transaction in the sense of an integrated value enhancement program. Overall, a picture of the operational or process-related strengths and weaknesses of the target company emerges, from which the effects on the financial ratios are then forecast, as well as possible measures after completion of the transaction. The results help entrepreneurs in evaluating the target company, in subsequent contract negotiations and in estimating future integration measures.

Commercial DD – when market position is a priority

The core of the service is the independent assessment of the target’s market and market opportunities. In commercial due diligence, the experts at HANSE Consulting therefore examine the sales markets for market share, segmentation, growth and the competitive situation of the company. The strengths and weaknesses of the company and the markets are determined in comparison to the competition. In particular, the top line/sales and revenue expectations of the target’s business plan are critically reviewed and the statements are aligned in close coordination with the financial and operational team. The assessment is carried out, among other things, through expert interviews and market surveys. The aim is to obtain primary information about the market and the positioning of the company that is as independent as possible.

Based on this information, an assessment is made by HANSE Consulting regarding the suitability of the potential purchase object for the purpose intended by the buyer as well as the strategic options after the purchase (for example, turnaround, buy-and-build, integration).