Due diligence is an investigation into a business which is carried out by a buyer or investor when they want to buy or invest in that business. It usually starts right at the beginning of the transaction and can continue throughout.
The purpose of due diligence is to give the buyer or investor a better picture of what they are buying or investing in. It examines certain areas of the business and will identify particular areas of risk. This can lead to tailored protections being drafted in the documents and it may also have an impact on price.
Some common areas where due diligence is carried out are; the financial strength of the business; the ownership of the assets; whether there are outstanding debts or other claims against the business; and any environmental or other liabilities that could reduce the value of the business in the future. If transport is at the heart of your business, there will also be investigations into your operator’s licence(s) and if you have ever been before the Traffic Commissioner. The circumstances of this will need measured handling.
At Backhouse Jones, our corporate team are happy to assist. We are experienced in carrying our due diligence for transactions of all sizes and types and have an in-depth understanding of businesses in the bus, coach and HGV sectors and issues peculiar to them. We believe due diligence should be carried out in a methodical, organised and expedient manner. We will listen to your thoughts and respect the manner in which you run your business, because we understand that each business is different and that you want to get the deal done. As part of your due diligence, you may want to consider having a compliance review, and details of this can be found here.
For more information, please speak with a member of our corporate team: