The ultimate success of buying, selling or merging with another company all comes down to the quality of the financial due diligence employed during the process. To judge the value of a deal involves knowing the strengths and weaknesses of the two parties and being able to accurately assign value to these facets.
It’s a complex undertaking and one that should not be attempted by those close to the deal. This is why the performance of financial due diligence in Thailand is becoming more and more of an outsourced task. It takes a measure of perspective when analysing a deal to spot potential ‘deal-breakers and red flags. The client may lack that perspective if they’re too focused on the end benefits that they miss the pitfalls.
If the client is new to the market sector, they may also underestimate the working capital required to operate the business or agree to a faulty valuation of certain factors through their inexperience.
Considering the Bigger Picture
By outsourcing the financial due diligence to qualified financial advisors in Thailand, the client acknowledges the objectivity needed to make key decisions and crucial valuations. They also recognise the value of engaging advisors who are familiar with the market sector and can look at the bigger picture of how events in the region may affect the market.
These advisors are aware that assets and liabilities on paper are only one portion contributing to a company’s intrinsic value. The strength of the market currently and trends toward future profitability must also be considered in gaining a true perspective of a company’s value.
This type of financial due diligence is called Commercial Due Diligence (CDD), and it’s crucial to accurately assess the future performance of a company.
Planning for Reality
There is a third type of financial due diligence called Operational Due Diligence (ODD) that is crucial in companies that are planning to merge and operate as one entity in the future. This type of due diligence helps prepare for the everyday reality when two separate groups of employees who may be using disparate operational structures and systems are asked to combine their efforts.
These eventualities have to be assigned a monetary value as well. When the integration of teams is less than satisfactory, it costs money every day until the problems can be solved. You need financial advisors on your team who understand the business, how it works, and who know the type of people required to run this type of business and can accurately assess the employee’s capabilities.
Find Qualified Financial Advisors
Before you enter into protracted negotiations for any type of business-related financial obligation in Thailand, hire a team of qualified and experienced advisors on your side who know the market and targeted industry inside and out. They can give you objective opinions from an inside perspective that will prove crucial to making the right decisions later.
They may help you succeed in your business aspirations or save you from making unwise decisions so you can intelligently restructure the deal. Either way, they will become trusted advisors who will help your business grow in the future.
