Due-Diligence

Financial Due diligence is correctly the preserve of accountants.

Legal due diligence is best done by lawyers.

Commercial due diligence is equally essential.

A.R.K. offers commercial due diligence services which complement legal and accounting processes in all commercial issues which can bear directly on the deal price, namely:

• Market share quantification to ensure compliance with Competition Authority requirements;
• Relative market share position and trends;
• Benchmarking of growth assumptions;
• Benchmarking of profitability assumptions;
• Benchmarking of contract management processes;
• Benchmarking of client renewal rates;
• Benchmarking of client acquisition effectiveness;
• Analysis of dependence on key clients;
• Analysis of owner benefits and underlying profitability;
• Analysis of reliance on key staff and “client portability” risks;
• Identification and benchmarking of key commercial drivers;
• Benchmarking of differential accounting policies where they impact on revenue recognition or profitability;
• Operational effectiveness benchmarking including sales per employee, payroll as a percentage of sales and average staff remuneration;
• Benchmarking of market penetration and potential;
• Identification of additional specialist commercial due diligence risk sectors, such as pensions liabilities, professional indemnity and insurance exposure, dispute resolution practicalities,  and property obligations.

We do not second guess the deal, but we do offer a benchmarked approach to understanding the commercial significance of typical risks in the market. All business is risky – it is the areas where a tolerance of ambiguity is commonplace in the markets we know where we concentrate our effort.

Reports
A.R.K. Due Diligence reports are designed to put the deal in context. Each report itemises issues for review, discussion or action as necessary  in a clear and informative format.

Reports can be integrated with accounting or legal report schedules and we are experts at speeding up the process rather than complicating it any more than it needs to be.

What our clients think:

As you’d expect we cannot disclose the details or nature of the projects on which we have recently been involved, but the following will give you a flavour of feedback we’ve received to date on several projects:

“ An exceptional report – thank you.”

“The clients were delighted that your team were quick, efficient and courteous – it reflected very well on us in some tricky discussions later.”

“I wish we’d used you first – we pulled out after digging deeper into [where suggested] – but we still blew £27k on the lawyers and accountants.  You’re probably right though that we should park it and go back in a year. It’s not terminal, but we have enough on our plate without this right now.”

“This finally helped me get [them] to understand why we needed to buy not build – thanks – even [directorX] is now fully on side.”

“The accountants thought we should get a massive increase in the retention that would have sunk the deal – your benchmark on [x]  helped me swing it.”

“[the lawyer] has gone back to firm up the disclosures on the leases – the partnership angle was new to me

“We’d thought their X% retention was good - its better than ours -  but we took your advice on them being below par. (For what it’s worth it’ll help us shake up the [xx] office as well).”

“Got it – in time – and guess what – no draft from the others yet – but it is only 7.30pm...”