ARE YOU GOING TO ACQUIRE A COMPANY?
KTP has conducted due diligence service for a target acquisition company.
What KTP can do for our clients?
- To ascertain the reasonableness of the net tangible assets of the target company with particular emphasis on contractual commitments, contingent liabilities, and impairment.
- To confirm and verify information that was brought up during the investment process.
- To identify potential risks in the investment opportunity and thus avoid a bad business transaction.
- To obtain information that would be useful in checking whether there be a room for negotiation of the price offered for the acquisition.
The target company is principally engaged as manufactured all kinds of air conditioning plants and service workshop of machinery. The purchaser was interested in the target company’s property and machinery. However, the purchaser would like to know which investment decision is more cost-effective, either rushed into professional marriages by the acquisition of the target company or purchase the property and machinery directly.
KTP was called upon to conduct background checks and investigations of financial information for acquisitions and mergers. In this case, the purchaser asked us to emphasize on investigating the value of the property and machinery and the target company’s activities.
It was a wise decision, as the results of the due diligence investigations were revealing. There was an inappropriate authorization on property ownership transferred, the status of legal charge on land and building after ownership transferred, high volume related party transactions, risky business practice, that could have created major future problems for our Client.
With these many issues, the Client decided not to move forward with the acquisition.