Due Diligence

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Main services

1. Financial due diligence
2. Tax due diligence
3. Arrange and coordinate external professionals in the areas of legal, human resources, IT and environmental due diligence.
4. Seller’s due diligence※

 

GCA FAS professionals who have extensive M&A advisory experience not only provide standard accounting reviews, but thoroughly investigate the actual operations of the target company. We strive to, identify multi-faceted risks associated with the investment to provide comprehensive due diligence advice which includes verifying the deal’s feasibility against the purpose of the acquisition, providing information that will contribute to post-acquisition management and risk analysis of goodwill impairment among others. Not only do we identify the risks but we propose countermeasures that would allow clients to avoid such risks to lead the M&A transaction to a successful outcome.

What is due diligence?

M&A due diligence in general is considered an overall investigation of the target company and is often called “Baishu Kansa” (acquisition audit), “Shisan satei gyomu” (asset assessment) or “Jizen shousai chosa” (pre-detailed investigation) in Japanese. The due diligence process is an extremely important part of the M&A process as direct access to the target company is made possible through, for example, interviews with management and employees and on-site visits to factories etc. Buyers may negotiate a lower purchase price if damages to the value of assets key to the transaction are found, or negotiate the terms of indemnification if unexpected contingent liabilities come to light as a result of due diligence. In some instances, a “deal breaking” matter or, information that may affect the buyer’s decision to go ahead may be found. As such, due diligence is a crucial part of the M&A process in that it holds the key to the success of the transaction because it allows the buyer to avoid incurring as many contingent losses as possible after the acquisition.
Although it is clear that the due diligence process is extremely important for clarifying the risks before committing to an investment, unfortunately in Japan, due diligence is considered to be a somewhat negative process of “finding flaws” of others. For this reason, due diligence has been confined to a kind of third-party-approval report or a fragmentary research based solely on accounting books, leading to many failed deals for Japanese companies in the past.
The professional staff of GCA FAS , with its abundant M&A and advisory experience, will not create third-party-approval reports or conduct simple accounting book reviews but will be fully committed to carry out due diligence with the goal of flushing out all risks associated with the investment as well as provide action plans to tackle crucial issues found during the process, to provide unparalleled professional advisory services that will lead to a successful M&A transaction.