Maxa värdet på ditt bolag genom att alltid vara DD-redo

Maximize the value of your company – be due diligence ready

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Orderliness at all stages means that your company gets a higher market value. Make sure to be ready for due diligence to be able to make a strong impression at an early stage. We have compiled the preparation process and listed what information you need to keep track of to be at the forefront.

By gathering all company documentation in the same place, keeping track of the numbers both forward and backward in time and developing a clear structure for due diligence work, you will go a long way.

From letter of intent to final agreement

Through due diligence, your company is inspected before a company acquisition or investment. The process is often extensive, but involves different amounts of work depending on the type of company being inspected and the purpose for which the inspection is carried out. There are different types of due diligence. Usually it involves fiscal, financial, commercial, legal and technical due diligence.

It all usually starts with the buyer going through what potential the acquisition has, a so-called letter of intent. At this stage, overall risks with the acquisition are reviewed, but opportunities and goals are also taking shape. Based on it, a list of information that the buyer wants about the company is compiled. Once the information has been delivered, it is carefully analyzed in several stages. The results of the analysis are compiled in a report that serves as a basis for decision-making for the buyer. The final agreement comes into being only after an agreement has been made regarding the price and arrangement of the purchase.

Why you should always be ready for due diligence

Is it really necessary to put energy into something that is not relevant at the moment? That’s a reasonable question. When it comes to due diligence, the answer is pretty obvious. The company gains a lot by always having all the formalities in place. If all the material is collected and structured, the process becomes smoother and above all it sends a clear signal to the buyer that your company is well managed. This reduces the risk for the buyer and will have a positive impact on the price, and increases the likelihood that the acquisition will take place.

Always ready for Due Diligence

A digital company binder helps your company to be DD-ready

How to prepare for due diligence

When it comes to a due diligence of your company, the potential buyer or investor usually gets in touch with a list of information that is requested. In order to be able to return in a reasonable time, it is a good idea to be out in good time with what is possible.

Gather all company information in one place

Order and order are everything. The easiest way to achieve this is to gather all documentation about your company in one place. It saves you time and gives you a better overview. Boardeaser has a digital document archive with compliance function and a due diligence checklist that helps to control the process. In addition, there is the possibility of digital share register and contract management. You can also create clear, up-to-date financial reports with the click of a button.

Make sure to keep these parameters in order before a due diligence:

  • The description of the business and its history
  • The organization of the enterprise in terms of both management and personnel
  • Economic governance
  • Market conditions
  • What customer structure and customer agreements look like
  • Competitor analysis
  • Forecasts for the future
  • Production
  • Existing products
  • Development of new products
  • Investment needs
  • Agreements and other legal documents
  • Annual report and financial statements for several periods
  • Financial systems and calculation tools

Some things may be constantly ready, while others need to be updated and angled in different ways depending on what current stakeholders are looking for.

Put the structure early

Financial reports, copies of agreements, updated market analyzes, personnel data and other relevant things can advantageously be ready when the opportunity arises, but there also needs to be a structure for due diligence work in the company. How do you go about producing financial reports? Where are important agreements? Who has control over the market’s development and how are changes in the company’s organization documented? Develop a way of working and structure that works to facilitate each due diligence process.

By keeping track of the process and setting the structure for how you respond to due diligence quickly and smoothly, a lot of time and energy can be saved. This makes it easier for buyers as well as the management and finance department of the company. In addition, it gives a well-organized impression, which increases the attractiveness of the company in the market.

Hire an external advisor

It is always a good idea to hire an external advisor to consult the company’s due diligence. The gaze of an outside party can be worth its weight in gold to find opportunities for improvement and shortcomings in documentation. However, by setting a clear structure from the beginning and gathering all the information in the same place, you can save on expensive consulting hours.

Boardeaser makes it easy to manage and keep track of all company formalities. Digital share register and DD checklist are examples of solutions in our web service that help you towards a well-run company. Log in or register for free to test Boardeaser for 30 days.

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