Outsource2india is a professional due diligence service provider with a select team of professionals with proven track record and successful experience over the years. The due diligence process requires the evaluation of tons of documents to ensure that nothing is ignored. And that`s why outsourcing due diligence services to an experienced company like ours helps you ensure that the due diligence process is uncompromising and hassle-free. At Outsource2india, we look at different types of documents. To share these findings with you, here are documents we will review if you outsource due diligence services to us – A collection of data on how a due diligence process is conducted by mergers and acquisitions in India, as well as the tools and methodologies used to do so. Meaning: To a layperson, the term “due diligence” refers to the appropriate examinations and precautions taken to identify or prevent foreseeable risks. It is the process of carefully evaluating a business situation in various aspects before making a decision. In an M&A transaction, due diligence provides the buyer with reliable and comprehensive background information about the intended transaction and also helps uncover potential liabilities and gaps, allowing the buyer to make an informed decision. There are different forms of due diligence depending on the scope/scope of coverage, such as financial due diligence, legal due diligence, commercial due diligence, and reasonable tax diligence. Other audits may be conducted in areas such as IT and human resources. It should be noted that there are no clear boundaries between these categories. One or more of the above areas may not be relevant to all due diligence engagements, and an appropriate scope is needed to focus on the issues of each individual transaction. Under the terms of the agreement, the scope of the engagement will allow advisors to prepare a report containing information relevant to the acquirer, which will serve as a useful decision-making tool throughout the transaction.
Types of Due Diligence: I. Commercial Due Diligence: This mainly includes the following types a. Operational due diligence: aims to assess the functional functioning of the target company. Consideration of non-financial issues of a target company, which may include assessing systems and processes, reviewing the established management team, staffing and other human resources activities, or assurance arrangements and risk assessments. b. Technical Due Diligence: Includes the review and review of intangible assets such as patents, copyrights, designs, trademarks and trademarks. This includes assessing the prior art of the target and other opportunities for improvement in this regard. Some of the main reasons to conduct commercial due diligence are: • Evaluate the opportunities available to the target company to increase its margins.
• Validation of operational improvements in the projections assumed by the provider. • Assess the competitive landscape and technology trends throughout the industry value chain, which are key metrics for understanding the target company`s activities. Business Due Diligence ♦: Technology/Intellectual Property: The buyer will be interested in the scope and quality of the target company`s technology and intellectual property. The areas of inquiry or concern are: • Who are the main customers and what is the revenue share of each? • What are the customer concentration problems/risks? • Will there be customer retention issues after the transaction? • How and what seasonality in terms of income and working capital needs does the target generally know? • Does the target company offer products, services or technologies that the buyer does not have? • What is the level of sales performance and revenue recognition? • What are the sales increases after the transaction? Basic Checklist for Conducting Business Due Diligence: • Market review including market mapping, market size, key players, industry value chain, value drivers, market potential, etc. • For each product line, understand the target company`s existing marketing strategy and the changes envisaged. • Get a summary of important new products, technologies, or processes in development. • Agreements related to the marketing of the target company`s products, franchise agreements, sales forms or documentation of the target company, including price lists, catalogs, purchase orders, etc. • Technology agreements, documents relating to proprietary technology developed/owned by the target company, including copyrights, patent applications, copies of all permits and licenses required for the It is necessary to carry out the activities of the target company. • Understand the status of relationships with key suppliers and suppliers, including a description of any supplier quality issues. Wip Legal Due Diligence: Legal due diligence is the process of capturing, understanding and assessing all the associated legal risks during an M&A process.
Some of the main reasons to conduct legal due diligence are: • Better understand the legal agreements and regulatory compliance of the target company • Assist in the drafting of the relevant M&A agreement • Identify obstacles to closing the transaction Key areas include: Key contracts: ♦ One of the most time-consuming (but critical) elements of a due diligence investigation is the Review of all material contracts and obligations of the target company.