Business Diligence

Identifying risks and opportunities as early as possible

Both acquisitions and divestments of companies and individual business areas involve risks and opportunities. Every transaction leads to far-reaching changes in the structure and culture of the organisations involved. That’s why it’s extremely important to analyse and evaluate the company that is being targeted for acquisition accurately. Creating transparency about all of the organisational structures and processes involved is a decisive factor in the long-term success of a transaction.

Important questions include: What are the potential deal-breakers? What potential value should be further analysed within the due diligence process and then implemented after the deal? How can buyers and sellers gather, review and analyse data from potential investors or candidates for a takeover or merger as early as possible – and make effective long-term decisions?

Acquisitions, mergers, divestments: All-round excellence for successful transactions

The Due Diligence team at PwC answers your questions and actively helps you with decision-making. We analyse your company’s business-related and tax-related risks and opportunities and the target company’s financial risks and opportunities during M&A transactions. We do this by using the latest digital tools, established methods and comprehensive industry knowledge. This puts us in a position to visualise initial results quickly and provide information about the transaction target. Our clients benefit from the fact that we always use the most up-to-date analytical methods. We provide meaningful analysis that is specifically adapted to your unique situation and that helps you to effectively prepare for your transaction. We can also identify potential value and transaction-related risks as part of a comprehensive business due diligence process, in which several different disciplines work together.

Your Deal is our Deal

We will help you drive growth and secure your future: We accompany you at every stage, and you can access our international network whenever necessary. Our clients know they can rely on us, which is why we’re now one of the world’s leading transaction consultancies. We believe your deal is our deal. Together, we get the right deal for you – even in times of great change.

Financial Due Diligence

Comprehensive analysis to support good decisions

From acquisitions and mergers through to divestments: Thorough due diligence analysis is the foundation of every successful transaction. It aims to identify the financial risks and opportunities – and opens up a range of questions. What is driving the business? How can I find out more about the target company’s operational capacity and its supply chain? Is the business plan realistic? How has its working capital developed in the last few years? And which purchase price adjustments need to be considered?

The PwC team gives you the answers you need. Our financial due diligence covers detailed analysis on accounting and profit and loss, cash flow statements and key operational factors that play an important role in the purchase decision. By delivering analysis that is tailored to your specific situation, we can provide targeted answers to your questions and identify potential value, financial risks or possible deal-breakers at an early stage.

See what’s relevant tomorrow – today: Proper preparation for the purchasing decision

We can work together with you and your team to develop a due diligence plan that is customised to your needs – whether you are a buyer or seller. Our experts accompany you throughout the entire transaction, from process planning through to discussing the final reports with the buyer, seller and investors. Our portfolio for the sell-side includes vendor assistance with Factbook and vendor due diligence. For the buy-side, we support with red-flag reports, buy-side due diligence reports and closing accounts reviews. You can rely on our precise profit and loss calculations, working capital analyses, cash flow statements, and analyses of net debt and quality of earnings. We combine the results of our historical analysis with the results from commercial due diligence and operational due diligence to evaluate the strength of the business plan. Based on a systematic analysis of a company’s value drivers and the recommendations we develop from this analysis; our clients always have all of the information they need. That’s how we generate real added value.

You can also rely on us at further stages in the transaction process: We can show you the effects that the results of our detailed analyses will have on the purchase price negotiations and the Sale and Purchase Agreement (SPA). We also provide clarity about which aspects are most important for potential buyers – particularly for private equity investors or banks. We work closely together with our experts in tax due diligence and can access the entire global PwC network at any time. On top of this, we use the latest digital tools and place a strong emphasis on efficient data analysis. Our Data Analytics team is always available to support us by evaluating and visualising complex volumes of data in order to generate the most valuable insights possible. In this way, we make sure that your questions are answered quickly.

Financial transparency from the very beginning: Strategic, thorough and relevant. We help you drive your growth and secure your future

Financial due diligence is the cornerstone of the due diligence process: Our Financial Due Diligence team has decades of experience and deep industry expertise and always takes a thorough approach to make sure we create a solid foundation for decision-making. After transactions have been completed, we support our clients with any questions they may have about post-merger integration. We’re your partner for every stage in the transaction process.

Tax Due Diligence

Tax-related topics with a significant impact

Identification of tax-related risks and opportunities is an important step during transaction projects. Potential buyers ask themselves a range of questions: Are there material tax-related risks associated with the company targeted for acquisition? Will the transaction trigger transfer taxes? What are the consequences for the transaction structure? Should the buyer take over individual assets or legal relationships from the target company (an asset deal) or purchase shares within a company (a share deal)? What impact do these factors have on the purchase price and purchase contract? During tax due diligence, these questions are examined, and tax-related risks are identified. The resulting insights form the basis for an optimal tax structure for the transaction.

Taking the entire transaction process into account

Tax due diligence evaluates the tax-related situation within the target company and provides insights for both buyers and sellers. By providing a comprehensive assessment of any relevant tax risks, effective due diligence makes it possible to reflect these risks at an early stage in the purchase price negotiations, the Sale and Purchase Agreement (SPA) and the transaction structure. Our team can develop an approach to tax due diligence that fits your specific situation. At the same time, we are in constant contact with our colleagues from other due diligence disciplines. Together, we can make sure that all available information is analysed and classified in a thorough and appropriate manner. Our interdisciplinary team of tax consultants, auditors and transactions experts supports our clients at every stage in the transaction process – from the purchase decision through to purchase contract negotiations and integration.

All tax-related information from a single source

Our tax team has the answers to all of your questions. From tax due diligence through to the purchase contract and tax structuring, we support companies and private equity investors throughout the entire transaction process. We can also access PwC’s international network of tax specialists at any time. As a PwC client, you benefit from our many decades of experience as a leading transaction consultancy.

Commercial Due Diligence

Assessing a company’s readiness for the future

Commercial due diligence is not only about checking the performance of a company in the past – it also systematically analyses the risks and opportunities that a given business model may face in the future. In this way, it provides an assessment of a company’s readiness for the future.

It involves a thorough analysis of a target company before an acquisition, taking into account perspectives from the market through to customers and competitors, and is always closely interconnected with other due diligence disciplines such as financial due diligence, operational due diligence, technology due diligence and tax-related due diligence. The aim of commercial due diligence is to provide a qualitative and quantitative validation of the Unique Selling Point (USP) and business plan of a company that has been identified as a target for a transaction. This validation is based on a comprehensive analysis of the sustainability of the business model, the market environment, the customer behaviour and the company’s positioning within its current and future market environment. Commercial due diligence forms the foundation for decisions about whether to acquire a company or individual business area.

Proper preparation for the purchasing decision

Our skills and experience cover sell-side and buy-side due diligence. We also have decades of experience in developing organic and inorganic growth strategies, market entry strategies, exit strategies and benchmarking exercises. Our commercial due diligence reports are aimed at financial investors (private equity) as well as companies and their management teams. Financing banks to a transaction also use these reports as evidence for their decision making. This means commercial due diligence plays a vitally important role in supporting the final decisions in making an acquisition or divestment.

Deep industry knowledge to support successful transactions 

Access to the right expert at the right time: Our international team works closely with our colleagues from the Strategy& team to provide our clients with deep and up-to-date industry expertise from across sectors – from the industrial manufacturing through to building, construction, transport and logistics, business services, eCommerce, retail, consumer goods, pharma and life sciences, as well as healthcare, travel, sports leisure, technology, media and telecommunications.
We accompany our clients throughout the entire transaction process and provide the relevant information to support decision-making for their specific transaction.

Accounting Due Diligence

Analysing and adapting accounting processes

What do companies have to be aware of when analysing the accounting systems and process within the target company before an acquisition? Which changes to the accounting frameworks, systems and processes would be necessary after an acquisition? How will the target company’s processes and systems be integrated once the transaction is complete?

Accounting and process expertise from a single source

Our experts analyse the systems and processes of the target company on your behalf. We can show and explain any necessary changes and provide recommendations for how to make the integration process successful. Our team combines accounting and process expertise with decades of experience from a huge number of M&A projects.

Speed and quality for secure planning

Our clients benefit from our internationally recognised expertise, as well as our rapid analysis and reliable quality. This means they know, at an early stage, what effects the changes to systems or processes will generate. It’s our goal to give you a sense of planning security.

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Damir Kecko

Damir Kecko

Partner, Deals, PwC Croatia

Darija Hikec

Darija Hikec

Director, Deals, PwC Croatia