Due Diligence &
Our experienced consultants provide in-depth analysis and expert guidance to help businesses make informed decisions on mergers, acquisitions, and other financial transactions, and ensure they have a comprehensive understanding of the value and risks associated with their investments.
In overseas company acquisitions and mergers, a comprehensive situational analysis is particularly crucial.
The merger process may have different stages depending on the company's field of operation, but there are mandatory researches that need to be carried out in general. The accuracy of these researches, which should be applied to all types of companies, impacts the decision-making process of the companies.
The process typically begins with the Company's Information Memorandum, and involves passing through various research stages until the final decision is reached. Maintaining transparency is important for both parties at every stage.
Due Diligence (Thorough examination and evaluation) is used in all corporate finance methods, such as privatizations, company acquisitions and mergers, minority share sales, allocated sales, public offerings, and project financing.
The transparency of the data or information under scrutiny during the due diligence process is important, as well as the accurate interpretation and analysis of this information in the final report.
It is important to remember that no due diligence investigation can accurately predict the future with 100% certainty. Those responsible for conducting the due diligence process should ensure that the research is based on 100% accurate and legally valid information, presented transparently to all parties, facilitate a discussion environment, present forecasts in a concrete manner, reflect positive and negative factors objectively without interpretation, and avoid personal biases when presenting opinions in the conclusion section.
Our primary principle in the examination process during company merger or acquisition is to always have legal oversight and supervision by an attorney. One of our fundamental criteria is to have the legal validity and value of every document included in the report confirmed by our foreign country attorney partner.
It is necessary to include any errors or risky situations in the accounting or legal status of the company to be acquired or merged in the report.
During mergers or acquisitions, detailed information is provided on the net debt levels of the companies to be acquired, guarantees and securities provided to third parties, future risk levels, necessary fixed capital and maintenance investments for the business, annual inventory difference value, personnel rights, doubtful and overdue receivables, collection problems and reasons, ongoing lawsuits and enforcement proceedings, communication between partners, information on the most active trading customers, number of key personnel, analysis of working capital, evaluation of past financial data, reasons for rapid growth of the company in the short term, ongoing projects, contracts, public debts, and bank relationships.
The significance of the report cannot be denied in this stage, where the objective is to reveal the genuine intention of the company for sale or merger.
For instance, in situations where a company's production and marketing companies are separated, this can have a negative impact on investors if an IPO is planned for the future. The production company's profitability may be kept low while profits are transferred to the marketing company. This results in closed value transfers between the companies and can pose a risk for investors. In such cases, if an IPO is being considered, it is advisable to merge the production and marketing companies prior to the IPO or to undertake a new restructuring that will ensure complete consolidation.
If the companies to be involved in a merger or acquisition are part of a group of companies or a holding, merging similar companies within the group, liquidating or selling some of them, and separating those whose activities are intertwined, can simplify and make the structure of the holding or group of companies more understandable. It is important to examine and simplify the internal structure of the group or holding before presenting it to investors. Another important point is the relationship between the company's shareholders and the internal operations. Problems among shareholders, as well as risks related to hidden debt items, can unfortunately have a negative impact on the company's marketing process. Therefore, before initiating the stages of company merger, liquidation, sale, or acquisition, it is necessary to streamline the internal operations and avoid transactions that may raise further concerns for the investor.