Due Diligence

Proven Track Record

Bellingham Wallace has earned a track record of successfully completing numerous due diligence assignments across a diverse spectrum of organisations, catering to both substantial transactions up to $100 million and smaller transactions below $2 million.

Our primary due diligence services encompass Vendor Due Diligence for sell-side operations, assisting businesses in preparing for divestment and sales processes, as well as Buy-Side Due Diligence to facilitate acquisitions and the associated debt funding requirements.

We prioritise in-depth examinations of critical financial and commercial aspects, including the identification of value drivers and the preparation of comprehensive risk registers. Furthermore, our in-house tax experts specialise in both buy-side and sell-side Tax Due Diligence, enhancing our ability to provide comprehensive support for your business transactions.

Financial Due Diligence

Financial due diligence plays a pivotal role within the broader due diligence framework, especially in scenarios such as mergers and acquisitions or investment prospects. This entails a meticulous review and evaluation of a company's financial data, intended to gauge its financial stability, past performance, associated risks, and prospective worth. Its primary goal is to offer a comprehensive insight into the target company's financial well-being, historical financial track record, future outlook, and key financial catalysts.

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How We Can Help

Financial Statements

A detailed examination of financial statements, including the balance sheet, income statement, and cash flow statement. The focus is on understanding the accuracy and reliability of the financial information presented, identifying any potential discrepancies, and assessing the quality of financial reporting.

Historical Financial Performance

Examining revenue trends, profitability, gross margins, cost structure, working capital, cash, and other key financial metrics. The review identifies patterns, anomalies, and areas of strength or weakness in the company's financial history.

Projections and Forecasts

Assessing the reasonableness and accuracy of the projections, analysing the underlying assumptions, and considering the factors that may impact the achievability of the projections. It helps in understanding the potential future financial performance and the risks associated with the forecasted numbers.

Cash Flow Analysis

A thorough analysis is conducted as part of buy-side DD to assess its liquidity, cash generation capabilities, and working capital management practices. The process involves examining the cash flow statement, identifying the sources and uses of cash, evaluating the cash conversion cycle, and assessing the company's ability to meet its short-term and long-term obligations.

Debt and Liabilities

Our financial due diligence process also includes an analysis of debt structure, including loans, bonds, leases, and other liabilities. In a share transaction, it assesses the terms and conditions of the debt, repayment schedules, interest rates, and any associated risks. Additionally, it examines contingent liabilities, such as pending legal disputes, warranties, or product liabilities, which may impact the company's financial position.

Financial Controls and Systems

Reviewing internal controls, accounting policies, information systems, and the overall financial governance framework. It helps identify any potential weaknesses or deficiencies that may pose risks to accurate financial reporting.

Financial Drivers and Risks

Analysing factors such as market dynamics, industry trends, customer concentration, pricing strategies, competitive landscape, regulatory environment, and other external and internal factors that may influence financial outcomes.

Synergy Analysis

Whether mergers or acquisitions, our financial due diligence process assesses the potential synergies that can be realised from the transaction. It includes analysing cost savings, revenue enhancements, economies of scale, and other strategic benefits that may arise from combining the target company with the acquiring entity.

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The Bellingham Wallace scope is based on the nature and size of any transaction along with the level of potential risks being assumed by our clients. Contact us to see how our tailored solutions can support your next business decision.