Due diligence

The cost of investing in the wrong business is far higher than the actual investment. The risk of making a uninformed investment is high and it is therefore critically important that you team up with the right advisors. Once you have identified an acquisition target, it is important to evaluate the risks associated with the potential investment in order to ensure that all the risks have been taken into account as part of the investment decision. This is where we come in.

why crest capital?

Collectively our team has performed hundreds of due diligence assignments on a wide variety of businesses ranging from single location, privately owned businesses to multi-national corporates listed on international stock exchanges.

We have performed due diligence assignments on a broad spectrum of businesses in almost every sector of the South African economy.

We follow a risk-based approach in performing financial and tax due diligence by focussing the due diligence review on the following key risk areas:

  • Transaction risks: These risks relate to anything that could potentially affect the proposed transaction, such as the valuation of the business, the timing of the purchase consideration, the potential warranties that need to be put in place, and any conditions precedent that may need to be included in the sale and purchase agreement.
  • Operational risks: In assessing these risks we would consider the nature of the businesses’ products and services, the market (its customers, suppliers and competitors), its management and staff, its operational processes and any other relevant risks.
  • Financial risks: These risks relate to the financial statements of the business and whether the records give a fair reflection of the results and financial position of the business and provide a suitable basis to price the transaction.

Using a third party to perform the due diligence assignment enables you to get an independent view of the risks of the transaction and ensures that you avoid potential deal fever and later surprises.

As a result of following a risk-based approach, each due diligence is tailored to focus on the key issues and critical success factors of the target business.

We are able to scope each assignment based on your specific needs. Our services therefore range from a limited scope, high-level review focussing on specific areas to a detailed, full-scope due diligence which includes an operational and tax review.

Our high quality reports are an invaluable tool when negotiating transaction financing with banks and other funders or seeking approval for new investments from with your own board.