Legal, financial and tax due diligence are essential to understanding a target company’s historical and current position. Commercial due diligence provides a different and complementary perspective: it evaluates the strength, sustainability and future potential of the business.
Historical performance is important, but it represents only a snapshot of what the company has achieved. It does not necessarily demonstrate that revenues, margins, customer relationships or competitive advantages can be maintained after the transaction. Commercial due diligence helps determine whether the target company’s market position, business model and growth prospects reasonably support the assumptions underlying the acquisition.
An Independent Commercial Perspective
Commercial due diligence is frequently conducted internally by the acquiring company. Internal resources may have valuable industry knowledge, but they are often required to complete the review alongside their regular responsibilities and within demanding transaction timelines. AZTEC joins the M&A team as a dedicated and independent resource. Working alongside the buyer’s executives, internal personnel and legal, financial and tax professionals, we provide the additional capacity and experienced commercial perspective required to conduct a focused and thorough assessment.
Our role is not simply to confirm the information provided by the target company. We examine the business critically, challenge assumptions and identify the risks and opportunities that may affect its future performance and value.
Areas of Commercial Review
The scope of each mandate is adapted to the nature of the transaction, the industry and the buyer’s objectives. Depending on the circumstances, our review may include:
Where appropriate and permitted by the transaction process, the review may also include discussions with management, selected employees, customers, suppliers or other stakeholders to develop a more complete understanding of the business and its reputation.
Supporting a Better-Informed Investment Decision
Our findings provide the buyer with a clearer view of the target company’s commercial strengths, vulnerabilities and future potential. They can also help validate the acquisition strategy and offer, identify matters requiring further investigation and establish priorities for negotiations and post-acquisition integration.
The objective is not simply to determine whether the transaction should proceed. It is to help the buyer understand what it is acquiring, what must be protected or improved and what will be required to achieve the expected results.
AZTEC brings dedicated capacity, independent thinking and practical business experience to the commercial due-diligence process; helping the M&A team make a more informed and confident investment decision.
