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The Banking and Corporate Finance Training Specialist
Due Diligence in Corporate
Finance Transactions
This course is presented in London on:
5 June 2018
This course can also be presented in-house for your company
or via live on-line webinar
http://redcliffetraining.com [email protected]
+44 (0)20 7387 4484
Course Overview
This course is an introduction to due diligence for buyers and users of due diligence reports. It addresses the purpose of due diligence, the range of areas that may be
subject to due diligence investigation, and how due diligence fits in to M&A and capital markets transactions.
Participants will:
Gain an introduction to the concept of due diligence Understand its significance and its place in the M&A process Explore the full range of due diligence areas, going beyond the standard financial/ tax
remit and into commercial, strategic and other specialist service areas Focus on outcomes, case studies and specific learning experiences
Consider alternative methods of service delivery such as vendor assist and vendor due diligence
Develop an appreciation of how due diligence can support and challenge transaction pricing
Study how due diligence feeds into key legal areas such as the SPA, disclosure,
representations, warranties and indemnities Learn how due diligence providers support capital markets transactions, such as IPOs
and Takeover Code deals
The trainer has worked for over thirty years in corporate finance and equity capital markets, completing transactions for clients from over thirty countries in Europe, the
Americas and Asia Pacific. He is an experienced commissioner, recipient, reader and user of due diligence reports.
Due diligence is, more than ever, central to transactions. If it were ever a box‐ticking exercise, it certainly is not one now. Even on a small to medium sized transaction
(£20million or so) due diligence costs can exceed £500,000. Buyers know they need due diligence, but do they know how to get best value for it? A well-informed buyer will think hard about where due diligence should focus, and the scope of the diligence services it
needs.
The main advisers ‐ financial and legal ‐ on transactions have a role to play too. The importance of directing the due diligence enquiries, and correctly interpreting the
findings, goes to the heart of any deal. Good advice to the client will add value and help ensure a successful outcome.
For their part, many diligence providers have a high sense of commercial awareness. They welcome the chance to discuss key findings with their clients and are consistently
trying to make their reports commercially focused, feeding directly to the value of a transaction.
The course is therefore designed to help clients and their advisers to understand how to approach the due diligence aspects of a transaction. It is no substitute for the role of
diligence professionals, but it will give attendees a better understanding of what due
Course Overview
Course Objectives
Background of the Trainer
http://redcliffetraining.com [email protected]
+44 (0)20 7387 4484
diligence entails, how to engage with diligence providers, and how to manage the due diligence process. Starting with an explanation of due diligence itself, the course
considers how due diligence is procured, tours the growing range of areas covered by due diligence, and concludes by explaining how the due diligence findings link in to other
areas of a transaction.
There will be a strong emphasis on practical, real‐world issues throughout, with key
messages and learning points underpinned by examples from the trainer’s extensive experience.
The course is designed for those who may need to use due diligence in the course of
these work, with particular reference to mergers, acquisitions and related financings. We will cover: The origins and purpose of due diligence
The ever‐widening scope of diligence work Providers and delivery models
How due diligence fits into a range of transaction processes The ways in which due diligence affects transaction outcomes
A sense of what due diligence may cost
The intention is to develop understanding, awareness and sophistication on the part of due diligence buyers and users.
Introduction
What is due diligence? A due diligence defence Suppliers
Users (bank lenders, private equity firms and other providers of finance, as well as companies on behalf of their investors/ shareholders)
Who commissions and who pays Liability of due diligence providers
Due diligence in the M&A timetable
The traditional process, with all buyers undertaking independent due diligence A process underpinned by vendor due diligence, prepared ahead of wider marketing
The pros and cons of VDD
Smart preparation: Adding value through pre‐transaction due diligence/ Sale readiness
review Phasing: the various stages of data release The evolution of data rooms
Interaction with other areas of information provision such as teaser, information memorandum, tours/ site visits, management presentations
Legal status of diligence reports Due diligence from the target’s perspective; managing the subject of the investigation
The key areas of due diligence
An overview of each area, reviewing the key areas of investigation and typical/ potential findings, including: Financial
Course Content
http://redcliffetraining.com [email protected]
+44 (0)20 7387 4484
Tax
Legal Contracts Plant and equipment
HR Market, commercial and strategic analysis
Brand strength Customer referencing Property and land use
IT Operational analysis, e.g. benchmarking
Insurance Pensions
Regulatory compliance Reputational enquiries People/ psychometric/ behavioural
Patents/ IP Competition risk
Environmental Resources/ reserves Synergies analysis, costs and benefits
Separation analysis ‐ Carve outs and proformas
Reciprocal due diligence ‐ on a buyer where part of the consideration is in shares
Discussion will include key areas of focus, examples of discoveries and potential risk areas
Presentation of key findings
Vendor assistance services
Pre‐sale preparation
Cleaning up businesses pre‐sale
Financial presentation in a form suitable for a transaction Scope for value creation
How due diligence integrates with the definitive agreements and goes to value Heads of agreement
The legal framework ‐ SPA and disclosure
Representations and warranties
Locked box or completion accounts elements – net debt and working capital ‐ final
pricing Potential for price chips
Earn‐outs/ contingent consideration Retentions and escrows
Indemnity Capital markets transactions
Prospectus and sponsor’s role Long form report
Working capital review Consultants’ reserve reports Statement of Benefits
http://redcliffetraining.com [email protected]
+44 (0)20 7387 4484
Case studies The course will include a range of case studies such as:
A classic financial due diligence package
Fuel delivery business ‐ environmental due diligence
Tax discoveries around loan note interest
Contracting business ‐ due diligence to shape the outcome on cash and working
capital
Specialist retailer ‐ commercial due diligence
Merged businesses ‐ potential cost savings
Aerospace supply chain ‐ strategic and commercial
Petroleum consultants ‐ assessment of oil & gas reserves
Failed transactions ‐ The risks and consequences of limited/ incomplete due diligence
Conclusion Relating costs to value Trends in due diligence
The place of due diligence in your transactions Managing due diligence providers
What buyers and other advisers should look out for
http://redcliffetraining.com [email protected]
+44 (0)20 7387 4484
09:30-17:00
London
Standard Price: £675 + VAT Membership Price: £540 + VAT
In-House Training
Delivering this course in-house for a number of participants could be very cost effective.
The venue and timing can be agreed to suit the client, as well as the selection of the trainer and the
precise contents of the seminar.
Tailored Learning
All of our training courses can be tailored to suit your company’s exact training needs.
We will work closely with you to help develop a training programme with content that is unique for your
organisation.
Please email us on [email protected] for more information
E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact
requirements.
