Due Diligence in Corporate Finance Transactions

£675.00 +VAT

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Due Diligence in Corporate Finance Transactions Course Objectives:

This Due Diligence in Corporate Finance 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

This course can be presented in-house via live webinar.

Background of the Trainer:

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 in Corporate Finance Transactions Course Overview:

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 Due Diligence in Corporate Finance 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 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 Due Diligence in Corporate Finance 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.

Due Diligence in Corporate Finance Transactions Course Content:

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
    • 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

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

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Discounts

5-6 participants – 20% discount,7-8 participants – 25% discount,Over 9 participants – 30% discount

Select-your-course-date

19 November 2018