Business transactions and corporate finance
Anthony Bryan Due diligence takes different forms depending on its purpose:
1. The examination of a potential target for merger, acquisition, privatization, or similar corporate finance transaction normally by a buyer. (This can include self due diligence or “reverse due diligence”, i.e. an assessment of a company, usually by a third party on behalf of the company, prior to taking the company to market.)
2. A reasonable investigation focusing on material future matters.
3. An examination being achieved by asking certain key questions, including, how do we buy, how do we structure the acquisition, and how much do we pay?
4. An investigation of current practices of process and policies.
5. An examination aiming to make an acquisition decision via the principles of valuation and shareholder value analysis.
The due diligence process (framework) can be divided into nine distinct areas:
1. Compatibility audit.
2. Financial audit.
3. Macro-environment audit.
4. Legal/environmental audit.
5. Marketing audit.
6. Production audit.
7. Management background audit.
8. Information systems audit.
9. Reconciliation audit.