Due diligence refers to examining a potential investment before finalizing the agreement, with the goal of confirming the material facts regarding a sale. Properly performed due diligence protects both parties in a transaction from making decisions based on incorrect evidence. As such, most purchase offers usually depend upon due diligence results. Due diligence can encompass a number of different steps, including reviewing the financial records of the seller and the purchasing ability of the buyer and auditing a company’s management, marketing, production, and information systems. To prevent failed mergers and acquisitions, the valuation of a company is often linked to due diligence.
About the Author:
Investor and international financier, Willem Noltes has worked in finance and real estate for more than 20 years. He possesses significant experience in performing due diligence/capital formation/capital markets and presently owns and serves as Managing Partner of several investment companies and single purpose entities.