Due Diligence

Due diligence is the investigation of every aspect of a business that could affect its value and suitability in the process of taking over a business.

A due diligence is to “investigate, analysis & report” before the buyer to buy or merge. Through our analyse, the buyer will be expose to our report on company assets, liabilities, problematic contracts, benefits, potential and litigation risks.

In short, company sales, mergers and acquisitions will be following the same practice while sellers will need a reverse diligence in filtering potential buyers.

The categories of Due Diligence (DD) that we are going to perform and chapters that we are going to DD but however, we are not going to reveal here on the sub-chapters for DD:

1. Financial information

  1. Latest 3 years audited report
  2. Management financial reports
  3. Debtor & Creditors Aging
  4. General Ledger
  5. Capital Structure
  6. Inventory listing
  7. Planned projection vs actual sales chart
  8. Company internal procedures
  9. Other final information

2. Organization and Good Standing of Company

  1. Company incorporation documents
  2. Organization chart
  3. A copy of company’s minutes books and latest company sections
  4. The business address for all the Company’s outlets
  5. Agreements on shares subscriptions, voting trust and shares option
  6. Biographies of the senior management and personal information

3. Employees and Benefits

  1. Workers compensation and benefits
  2. The list of Union affiliations & contracts
  3. Collective bargaining agreements
  4. Company handbook % existing employment contracts
  5. Unemployment history & civil litigation
  6. Pay history and salary payment

4. Products and Services

  1. Major customers
  2. Products or Services growth rates
  3. Market shares
  4. Technology adoption
  5. Products profitability and cost structure

5. Customers’ information

  1. The analysis of top 15 customers
  2. The chain of strategic relationship
  3. How revenue stream works
  4. The relationship with top 15 suppliers

6. Legal and related matters

  1. A list of pending litigation
  2. Unsatisfied judgement
  3. Compilation of insurance policies in against litigation
  4. Reviewing BOD, shareholder & audit minutes
  5. Insurance coverage over the past 3 years
  6. Audit of intellectual properties
  7. Documents about proceedings with regulatory agency
  8. Description of environmental issues through (DOSH)

7. Research and Development

  1. Description of R&D department and personnel involvements
  2. New product pipeline

8. Marketing, Sales and Distribution

  1. Strategies and level of implementation
  2. The avenue for generating of new business
  3. The adoption of sales force model
  4. Implementation of marketing plan with allocation of budget

9. Competition

  1. Current competitive landscape through SWOT analysis

10. Real estate under balance sheet

  1. Listing of all owned and leased properties with locations
  2. Copies of deeds, mortgages, real estate leases, land titles and zoning approvals

Due Diligence Service

Our charges: 10% from the sales of business value (For example, if the sale of business at RM 200,000.00 then our DD fees will be 10% from the sale of business value (RM 200,000.00 X 10% = RM 20,000.00) and excluding out-of-pocket expenses.

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