Financial due diligence for buyers, and exit-readiness reviews for sellers - on UK deals between £500k and £20m, from a team that has run diligence on more than thirty acquisitions of its own.
Deals are rarely lost to bad luck. They are lost in diligence.
Between an accepted offer and completion sits the stage where the buyer's team takes the business apart: the earnings, the working capital, the debt that is not called debt, the forecast that funds the price. Prepared deals pass through it. Unprepared ones get re-priced at the eleventh hour - or die there.
We have run that process from the buyer's chair more than thirty times with our own group's capital. That is the discipline we bring, whichever side of it you are on.
Every pound of profit a buyer cannot verify costs several pounds at completion.
Why diligence decides the real price
Four places where the price actually moves. Everything else is supporting detail.
What the business really makes once the owner's costs, the one-offs and the optimistic revenue recognition come out. This number - not the one in the accounts - is what the price gets built on.
The cash the business needs to keep trading the day after completion. Seasonality, the debtor book, stretched creditors - and the peg that decides who funds the gap. More completion arguments start here than anywhere else.
The list is always longer than the balance sheet: arrears, deferred taxes, dilapidations, unpaid bonuses, hire purchase, customer deposits. Each one found late is a pound off your return instead of a pound off the price.
Can the story survive the numbers? The bridge from historic earnings to the forecast that justifies the price - tested assumption by assumption, because that forecast is usually what the funding is secured on.
Before your money moves, someone sceptical takes the target apart on your behalf. The report is written to negotiate with - findings ranked by what they mean for the price, the structure and the sale agreement, not by chapter count.
The same examination, run on your own business before any buyer sees it. What diligence will find gets found first, fixed or disclosed on your terms - so the wobble that re-prices unprepared deals never arrives. Sits alongside our sell-side practice.
Scoped to the deal, priced upfront, and pointed at the decisions that matter: the price, the terms, and whether to proceed at all.
What could realistically change the price or kill the deal? That is where the hours go. A £750k asset purchase and a £8m share deal need very different depth - the fee and the timetable are agreed before we start.
Data room, management sessions, and the cross-checks that catch what a desktop review misses: bank statements against reported takings, payroll against the org chart, VAT returns against revenue.
Findings ranked by money: what moves the price, what changes the terms, what needs a warranty or an indemnity in the sale agreement - and a team that stays available through completion.
The smaller the deal, the bigger the proportion of your wealth riding on it. A £1m acquisition that turns out to have £150k of unverifiable profit is a far worse day than a diligence fee. We scope the work to the deal size - the discipline scales down, the price of skipping it does not.
Typically three to six weeks from receiving the data, depending on the state of the target's records and the scope agreed. Exclusivity windows and funding deadlines can compress that - tell us the date and we will scope to it.
An audit asks whether last year's accounts follow the rules. Diligence asks whether you should buy the business, at that price, on those terms. It is forward-looking, deal-shaped and openly sceptical - closer to investigative work than to compliance.
Filed and management accounts, VAT returns, bank statements, the aged debtor and creditor books, payroll, contracts that matter, and access to ask questions. A well-run process gathers this in a data room; where records are thinner - common at this end of the market - we work with what exists and flag what cannot be verified.
Usually one of three things: the price moves, the structure changes to put risk back on the seller - deferred consideration, earn-outs, specific warranties and indemnities - or you walk away early, cheaply, instead of late and expensively. All three are good outcomes compared with finding the problem after completion.
Tell us about the deal. We reply within one working day.
Get in Touchaman@dnsassociates.co.uk
+44 (0)20 8903 6330
Linen Hall, Suite 304, 162–168 Regent Street, London W1B 5TB
