Operational/Financial Due Diligence
Transaction due diligence is often primarily viewed as something a buyer’s legal counsel performs to ensure there are no major legal or regulatory landmines that can terminate a deal’s viability or will need a resolution in short order. However, due diligence should also be viewed by the parties as a perfect opportunity to identify and begin addressing potential problem areas that might not be obvious in a basic legal review. Moreover, this period is when the organizations should start searching, identifying, and planning for those areas where the deal’s value can be fully maximized on a short timeline.
In addition to understanding the potential compliance risks that might be identified with one or more parties involved in a transaction, there are also areas of evaluation and perhaps optimization that fall more in the operational and/or financial categories. Operational matters can include issues like personnel/HR, technology systems and infrastructure, supply chain management, and others. Further, while we can provide valuation services and quality of earnings reviews, financial due diligence will typically cover revenue cycle management, accounting and treasury, financial analysis and modeling, managed care and risk-based contracting, market analyses, benchmarking, and more.
With our approach to transaction due diligence our emphasis is not solely on assessing and reviewing. We want to help our clients in identifying opportunities for value creation and, ultimately, maximization. Our method entails conducting assessments as a first step, coupled with a plan for how the parties can begin reversing problems and taking advantage of those areas where opportunities exist for greater value returns. This tactic is typically the first step towards post-merger integration planning, where the comprehensive due diligence can serve as the primary resource for mapping out the integration plan before the deal closes.
We understand that each potential transaction is unique, and our due diligence informs both the viability of the deal as well as the future success of the newly formed or combined entities. We provide conclusions and recommendations as to current practices compared to the market, both regionally and nationally.