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Due Diligence In Mergers And Acquisitions | Due Diligence In Joint Ventures

April 6, 2022by Mohammed Rahali

Due Diligence In Mergers And Acquisitions | Due Diligence In Joint Ventures

As in Mergers and Acquisitions, due diligence, risk management, and assurance are some of the key concerns in matters of potential Joint Ventures. The parties involved in a Join Venture all have a stake in protecting their interests and will want assurances that every other party will be able to fulfill its obligations under the agreement. Therefore the results of proper due diligence in a potential Merger and Acquisition will determine whether the parties wish to proceed with the Joint Venture.

Due diligence in Mergers and Acquisitions can take many shapes and forms depending on the contractual arrangement and the peculiarities of each engagement, and so it will look different from one case to another. in fact, due diligence procedures for Joint Ventures (JV) can vary widely in scope, depth, and focus. As a general matter, the main purpose of due diligence in Mergers and Acquisitions (M&A) is to protect the investment by identifying the risks associated with that particular transaction. Effective and efficient due diligence would always specifically address the risks
connected with the transaction.

Wincore Advisory Group assists companies by performing basic due diligence from the very beginning of any transactions and before they are signed off on, to make sure that the decision to proceed is a well-informed decision based on all the facts and data that protect the interest of the client. After the transaction structure has been identified, the second stage of due diligence in M&A is carried out to perform a detailed investigation will also help to prepare for possible further negotiations,  a walk-away, or a smooth post-transaction operation.

Due Diligence in M&A or JV could cover:

  • Assisting in the auditing of the company
  • Assisting in the legal research to confirm the existence of the company
  • Assisting in the verification of banking transactions
  • Assisting in the verification of the Title Deed
  • Assisting in the verification of the Trade License
  • Assisting in the verification of Owners
  • Assistance in the verification of Police records
  • Assistance in Third-Party evaluation of the assets
    • Verification of purchase value of assets
    • Verification of the current market price of the assets

The exact documents that will be required during due diligence can range depending on the full disclosure of the type of business, size of the business, and other factors. The initial required documents could be:

  • Corporate Records;
    • Trade License
    • Company Extract
    • History of Litigation (if applicable)
    • Company Regulation information (if applicable)
  • Record of Contracts, Investments & Assets;
    • Value of Assets
    • Location of Assets
  • Stockholder Information;
    • Passport copies
    • Residence Visas and IDs
    • History of Litigation
  • Corporate Bank statements;
  • Company Insurance information;
  • Office leases;
    • Title Deed
  • Financial Reports for the last year;
  • Other financial information.
  • The rights of the parties to enter into a joint venture
    • Does the transferring party have good title to the assets being transferred?
    • Are there any unstated or understated liabilities?
    • What is the value of the business and assets being transferred?
    • Are any third-party consents required for the transfer of the benefit of any contracts into the venture?
  • IT due diligence
    • Does the technology work as intended?
    • Does the party granting the use of specific technology has the right to do so?
    • Are there any restrictions on the use of the technology, i.e. licensing and Intellectual Property rights?
    • Do the staff have the necessary skills to operate the technology?
  • Warranties
    • Who is giving the warranties? This may include gathering information about the status and assets of the parties to the joint venture to ensure that they have the financial standing to meet any warranty obligations in the future.
    • Who owns the Intellectual Property?
    • Who will benefit from the warranties?
    • What will happen in the event a warranty is breached?

 

How Can Wincore Support In Due Diligence in M&A?

Joint ventures can easily go wrong if there is a mismatch of expectations as to the allocation of responsibilities, risks and rewards, and the due diligence process is often challenging and confusing to navigate. Therefore, it’s worth investing in effective and expert due diligence very early on before any transactions are completed.  Our experts are committed to facilitating due diligence in Mergers & Acquisitions that can help you make informed decisions that satisfy your business requirements. We work with you to craft your objectives and a way forward for any possible outcomes.  You can get in touch with our Corporate Team today, or book a free consultation with one of our experts today to get started.

For Support and assistance on this matter get in touch with our Corporate Team today. 

Wincore specializes in TaxEstateCorporate and Fiduciary matters. We provide pragmatic, flexible, and efficient solutions to individual entrepreneurs, startup businesses, foreign and local SMEs, multinationals, wealthy international families, HNWIs, and UHNWIs.

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Mohammed Rahali

Managing Partner

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