Acquisition due diligence - KPMG view

Acquisition due diligence

Acquisition due diligence assesses the risks and opportunities of a proposed transaction. It helps to reduce the risk of post-transaction unpleasant surprises.

It’s vital that the results of any due diligence process are relevant to the transaction including:

valuation of the target and therefore the purchase price
sale and purchase agreement (e.g. accounting definitions, accounting and tax warranties and indemnities, etc)
integration plan (e.g. deal synergies).
There are a range of circumstances in which companies can benefit from externally provided acquisition due diligence.

Where any organisation is considering an acquisition, merger or joint venture.
Where the organisation or deal manager has limited experience in undertaking due diligence.
Where existing advisers face a conflict of interest, or are not well placed to undertake the necessary due diligence.
Where the required due diligence demands technical capabilities and commercial experience beyond the organisation’s internal resources.
How we can help

KPMG can provide acquisition due diligence covering financial considerations (e.g. the integrity of historic and forecast information), tax, commercial factors (e.g. customers, suppliers, markets, competitors), superannuation, IT and human resources.

Appraising available information about the target and the proposed merged entity to more objectively evaluate the merits of the deal and the valuation supporting the offer price.
Identifying issues likely to affect negotiations.
Helping to reduce the risks associated with the deal by identifying and quantifying risks and benefits (e.g. identifying suitable warranties and indemnities for inclusion in the sale and purchase agreement).
Why select us

Global quality and consistency

KPMG’s international accreditation program delivers consistent global quality to all our clients. In each of KPMG’s 40 accredited Transaction Services groups our people go through the same rigorous training and skills development process.

Industry knowledge

We concentrate our experience by market sectors worldwide. For example, our global Financial Services Transaction team works exclusively with our banking, insurance and financial investment clients.

Transaction success factors

We’re continually analysing and researching transactions to improve our understanding of what makes a deal successful. The insights gained in this way are built into our services.

Service and performance

Penetrating financial, commercial and industry analysis is vital in understanding and managing the risks inherent in any business transaction. It reveals the risks and opportunities that lie behind the figures, allowing clients to challenge deal assumptions.

We deploy a proprietary methodology that’s under constant development by KPMG’s global research and development team - resulting in clear, quality reports focused on the transaction issues critical to the deal.

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