Our due diligence services
Financial due diligence
Our approach to due diligence differs from a "traditional" analysis of a business. By understanding the rationale for your proposed investment, as well as those matters which you have already identified as being of concern to you, we will focus on the issues that are the most important for your investment decision.
We focus our work on identifying risks and opportunities which affect value and impact your negotiating position, quantifying the impact of these issues on valuation and negotiating position and highlighting areas where contractual protection or specific post-deal actions are required
Our analysis usually includes such areas as historical / sustainable / forecast financial performance, financial position, indebtedness, reported or unrecorded contingencies, working capital, fixed assets, quality of the financial information, carve-out adjustments, key financial terms of existing contracts.
Financial due diligence is often accompanied by tax due diligence, legal due diligence, valuation, as well as HR due diligence, IT due diligence and environmental due diligence.
Tax Due Diligence
In our experience, tax risks are becoming increasingly important in deal negotiations involving Ukrainian assets. The identified historic tax risks can significantly impact value of the Ukrainian target company, result in deferral of payment of the purchase price or even be a deal breaker. Tax due diligence is aimed at identifying and quantifying historic tax risks of the Ukrainian target company through analysis of its compliance with tax laws and regulations as well as assessing the identified tax risks based on the available tax practice and tax jurisprudence. Our tax due diligence services include, among other things, analysis of methodology for computing, accruing, reporting and paying/ withholding major taxes for the Ukrainian target company focusing on major industry-specific areas of tax concern.
Commercial due diligence
Commercial due diligence, considering the target's relative market position, market conditions and outlook and the target's ability to deliver its forecast results. We tackle the issues at the heart of the business: market conditions and outlook, macroeconomic influences, industry structure, regulatory environment, competitive position and relationship with key customers and suppliers. We consider, in particular, the impact of these factors on the target's ability to deliver its forecast results which form the basis of evaluation of the company. Our integrated approach, which combines commercial, financial and tax due diligence services gives you better understanding of the business.
Legal Due Diligence
Each business face unique legal issues depending on its industry sector, operation model and jurisdiction. Even most thriving businesses may collapse if they ignore or leave legal threats unresolved. Identifying and mitigating such threats is a must for a successful transaction.
Considering all the peculiarities, we work closely with each of our client to develop customized approach for each project. This allows to reveal material legal issues in time- and cost-effective manner. The focus for each project varies and may include corporate matters, regulatory compliance, contractual obligations, movable, immovable and intellectual property, labour issues, management contracts, pending litigations and the impact these litigations may have on the profitability of the acquirer's investment.
Based on our analysis we help our client decide on further steps and implement adequate mitigation strategy, including potential contractual remedies.
Integrity Due Diligence
Integrity Due Diligence allows to identify and mitigate reputational and regulatory risks associated with business partners (including sanctions, politically exposed persons, risks arising from anti-bribery, corruption laws and anti-money laundering regulations, financial crime, unethical business behaviour, etc.) that are unlikely revealed through other due diligence procedures. We investigate the business track record, government connections, financial standings, reputation of individuals and legal entities. KPMG Forensic team ensures thorough review of publicly available sources, deep analysis of market expert opinions and clear presentation of findings, including visualization of relationships between entities and risks factors grading.
IT Due Diligence
Our professionals go beyond traditional enterprise IT due diligence with focus on internal IT processes. We are able to provide a holistic overview of the Target’s IT with in-depth evaluation of complex IT products and platforms, developed by a company.
Typical dimensions of our methodological approach include evaluation of the strategic IT alignment with business needs, review of the applied development methods and IT infrastructure set-up, holistic IT security assessment, overview of major contracts and licenses, open source code and cyber security scans.
Our findings enable us to point our critical risks in order to show their potential impact on the financial side of the deal. Examples of such risks may include loss of IP right with impact on deal rational, not encrypted servers or not secured data centers, excessive number of employees having access to source code repositories and others.