Dependencies
A target business may be dependent on a few key customers or suppliers. Such dependency usually becomes obvious when even a brief due diligence study is performed. Dependence on lenders may also be an important issue.
Other dependencies may not be obvious until more detailed work is performed, such as:
Shared services, provided by other companies in a group: for example shared office or warehouse space, accounting services, HR services and payroll processing, shared brand names or sometimes shared utilities. Board members and senior management may also be shared. The terms on which such services will be provided, and the duration, need to be agreed as part of the deal-making process.
The distribution of the target company’s products may be dependent on the services of a related party.
How we can help you
Our due diligence work can assist in identifying such dependencies at an early stage of the deal. At that early stage, it may often be easier to find solutions that eliminate or reduce the risk.
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