Due Diligence Aborts Business Purchase
A client who operated a distributorship business had an opportunity to purchase a competitor business to allow them to expand into a new geographical area.
Our client asked Red Dot to undertake due diligence work as part of the acquisition. Due diligence is the process of checking different aspects of the business being acquired to ensure as far as possible that you are getting what you think you are getting.
We completed some preparatory due diligence work as well as providing advice to our client regarding the different ways to structure the acquisition whilst our client continued discussions with the target company.
Unfortunately, our client decided that a commercial issue had been identified that meant that the acquisition could not continue.
We understand this is a very frustrating time for our client, so the thought of professional fees being due as well was not nice, so we agreed as a goodwill gesture to write off all our costs to date.
We were able to do this as we have a very close working relationship with this client, and unlike many other accountants, have the flexibility within our own business to do this.