Mergers and takeovers have been very much in the spotlight. Increase in scale, international expansion, portfolio expansion and innovation are important motives. The role of private equity in this is becoming increasingly important.
In order to be certain that a good choice is being made, time and money are invested in thorough due diligence processes in advance of a transaction. Traditionally these have had a strong financial and legal focus. Ultimately the main goal is to discover whether there are any ‘skeletons in the closet.’
Results from the past however do not offer any guarantees for the future. Whether it involves businesses, banks or private equity investors: they are all primarily interested in future value creation, which depends on more than just the historical financial results.
In our vision, a strategic due diligence process must be concerned with other essential questions as well, not just the traditional financial and legal matters. What chances are there for (organic) growth in the market, is one such question. But attention must also be paid to how the business can build a lasting competitive advantage and what innovative power the business has. The cost aspect is of great importance. How do we improve the cost level and what are possibilities for financial reengineering? But we also research the opportunities for synergy and the effectiveness of the management.