Due Diligence & Valuation Varun Dhingra€¦ · Due Diligence & Valuation Varun Dhingra. Mergers &...
Transcript of Due Diligence & Valuation Varun Dhingra€¦ · Due Diligence & Valuation Varun Dhingra. Mergers &...
Due Diligence & Valuation Varun Dhingra
Mergers & Acquisitions – Deal Lifecycle
Types of Due Diligence
01
03
02
04
LEGAL
COMMERCIAL/BUSINESS
OTHERS
FINANCIAL
Types of Due Diligence
Legal Structure
Contracts
Loans
Property
Employment
Pending Litigation
Earnings Assets
Liabilities
Cash Flow
Debt
Management
Customers
Competitors
Business Plan
Market Viability of Product
Assets
Taxes
Intellectual Property Rights
Environmental
Main Elements of Due Diligence
Company Analysis
Assessment of Sustainability of Earnings
Income Statement &Balance Sheet Analysis
Taxation and Related
People’s Matters
Legal, Compliance & Regulatory
Due Diligence – Case Studies
Fin-Tech
Restaurant Chain
FMCG Company
Type of DD Key Risk Discovered Recommendation to Investors Direct impact on Valuation
Financial & Legal Due Diligence
Commercial & Financial
Due Diligence
VendorDue
Diligence (Self DD)
• Presence of considerable debt on the business
• Impact of Political, Social, Economic and Technological factors not accounted in the growth plan
• Renous recommended Controllership (Portfolio Monitoring) to the investors
• Reduced valuation numbers
• Sudden increase in some expenses not capitalized for
• No internal process to account for humongous cash sales and payments
• Not applicable
• Incomplete hierarchy till the senior management
• Liquidity Crunch• Limited internal controls
for appropriate treatment of cash receipts
• Renous gave the necessary recommendations to the investors
• Yes, however neutral discussion around valuation
• Increase the probability of higher valuation numbers