Financial Due Diligence

Our Due Diligence (DD) Capability

Our due diligence team operates with agility to meet tight transaction timelines and possesses the resources and specialist knowledge for efficient, comprehensive analysis. As a 70-professional mid-tier firm, we combine comprehensive capabilities with focused responsiveness.

DD Risk Management

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

Corporate structures — analysis of group companies, subsidiaries, joint ventures, and associated entities; assessing legal and commercial implications and identifying risks.

Employees — evaluation of employment contracts, pension obligations, share schemes, and key personnel dependencies; assessing employment costs and liabilities.

Debtors — analysis of trade debtors, receivables, and credit risk exposure; assessing quality and collectability and identifying bad debt risks.

Creditors — evaluation of trade creditors, payables, and supplier relationships; assessing payment terms, identifying liabilities, and evaluating supplier dependencies.

Tax — comprehensive due diligence using in-house Chartered Tax Advisor expertise; assessing compliance, identifying tax risks and exposures, and evaluating tax losses and reliefs.

Financing arrangements — evaluation of bank facilities, loans, overdrafts, and debt instruments; assessing financing terms and identifying restrictions and covenants.

Cashflow — analysis of historical trends, working capital requirements, and forecasting; assessing cash generation and identifying risks.

Forecasts — evaluation of budgets and projections; assessing assumption reasonableness and forecast achievability.

Operations — evaluation of processes, systems, and efficiency; assessing operational risks and improvement opportunities.

Strategic issues — evaluation of positioning, competitive dynamics, and market opportunities; assessing strategic risks and identifying growth opportunities.

Real World Due Diligence Expertise

Our experience extends beyond advisory work — the firm has direct experience as an acquirer with multiple successful acquisitions. Partner Stuart Thomson previously served as a private equity principal, providing deal execution and portfolio management experience, and provided advisory services on significant infrastructure transactions including hospital PFI projects, the Croydon Tramlink debt restructuring, and the National Air Traffic Control System (NATS) privatisation. 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.

How Due Diligence Works

1) Initial scoping and planning — define scope based on transaction size, complexity, and risk areas; determine investigation areas (financial, tax, legal, operational); set timelines and assemble the team. Early scoping ensures comprehensive coverage while managing costs and timelines.

2) Information request and data gathering — request and gather documentation including financial statements, tax returns, contracts, employment records, corporate structure documents, and operational data, organised in a secure data room with appropriate access.

3) Financial analysis and review — comprehensive analysis including historical financial performance review, quality of earnings, working capital analysis, debt and creditor review, and financial projections assessment, identifying financial risks, unusual transactions, and areas requiring further investigation using advanced analytical techniques.

4) Tax due diligence — detailed tax due diligence using in-house Chartered Tax Advisor expertise: reviewing tax compliance, identifying tax risks and exposures, assessing availability of tax losses and reliefs, evaluating tax-efficient structures, and identifying potential tax liabilities. This analysis is critical for accurate transaction pricing.

5) Risk identification and assessment — identifying and assessing risks across corporate structures, employment arrangements, creditor and debtor positions, operational risks, and regulatory compliance; evaluating materiality and potential impact on transaction value and terms to inform negotiation strategy and deal structuring.

6) Reporting and recommendations — a comprehensive report detailing findings, identified risks, mitigation recommendations, and impact on transaction terms and pricing, presented to stakeholders and supporting negotiation of deal terms.

What You Get With Acumon

• Corporate structure, employee, debtor and creditor evaluation
• Tax due diligence with in-house Chartered Tax Advisor expertise
• Financing arrangements, cashflow and forecast review
• Operations and strategic issues assessment
• Secure data room organisation
• Reduced-cost options for smaller businesses

Why Acumon for Financial Due Diligence?

• Chartered Accountants and registered auditors with in-house Chartered Tax Advisor expertise
• 70-professional mid-tier firm; 90+ UK-based staff firm-wide
• The firm has completed multiple successful acquisitions as an acquirer
• Partner Stuart Thomson: former private equity principal; advised on hospital PFI projects, the Croydon Tramlink debt restructuring, and the NATS privatisation
• Only £37k short of the top 100 in the Accountancy Age 50+50 list for 2024

Get a Fixed-Fee Quote

Tell us what you need and we'll come back within one business day with a clear scope and a fixed price — no hourly-rate surprises. Call 020 8567 3451 or use the form and we'll be in touch.