Due diligence

Due diligence provides a detailed overview of the company. Due diligence is an important part of every purchase transaction, helping investors to take a closer look at all aspects of the company before the planned transaction. The information gathered during due diligence is also used in negotiations and helps to identify the risks to be hedged in the sales contract.

Due diligence is a thorough business, financial, tax and legal analysis of the acquired company. As a result of the analysis, we will prepare a report that provides a detailed overview of the audited company so that you can make an informed decision. This allows for a better understanding of the company's business model and key growth factors, the risks identified in the analysis and recommendations for dealing with them. The information gathered during due diligence will also be used in negotiations.

Read more about the due diligence.

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The extent of due diligence depends on the transaction and the controlled entity, but may focus on, for example:

• Quality of earnings - validating management adjustments, considering findings in the due diligence and one-off items, and the impacts of accounting estimates;
• Historical trading results - analyzing growth drivers, top customers, revenue and margin development per client, segment or product and KPI’s relevant to the field;
• Analysis of net debt to identify potential debt-like items and the seasonality and requirements of working capital;
• Quality of financial and management reporting - commenting on the finance functions and controls, reporting and budgeting process etc.

TESTIMONIAL

Inspecta Estonia OÜ belongs to the international organization Kiwa, which ranks among the top twenty leading organizations in the world in the field of testing, technical inspection, and certification (TIC).

In 2023, we acquired the Estonian company Metrex Mõõtekeskus OÜ. The company specializes in the calibration and verification of measuring instruments, ensuring their operational functionality and proper usage. Metrex is one of the providers of weighing scale calibration and certification services. In the field of fuel tank calibration, Metrex holds a leading market position. With the addition of Metrex, our range of services at Kiwa has expanded.

The advisory team at Grant Thornton was engaged to conduct financial, legal, and tax-related due diligence, and the legal advisory team was involved in the process of signing the Share Purchase Agreement (SPA). Thanks to the professional and efficient work of the advisory team, we gained a comprehensive overview of Metrex Mõõtekeskus OÜ’s financial standing, operational strengths, market potential, and associated risks. The due diligence process contributed to negotiations regarding the terms of the purchase-sale transaction.

Tõnu Roosaar
CEO of Inspecta Estonia

Financial due diligence

Financial due diligence varies notably from a financial statement audit, as it analyses and explains the reasons and drivers behind the financial numbers and changes in business performance.

The scope of the due diligence depends on the company and we work together with you to put together a scope that will help you in achieving your goals.

A thorough due diligence will help you reduce risks, identify key matters for purchase agreement negotiations and post transaction integration of the target, and make sure there are no surprises at later stages.

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