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Introduction
We were approached by one of our contacts (solicitor)
to perform a due diligence review of a prospective target company.
In advance of the appointment we provided indicative
checklists and costs. It transpired this was a referral from
another firm of solicitors and was a Malaysian company that
was a world authority on exotic mushrooms.
Due to the likely timescale and remoteness of
the client it was agreed to accept the assignment provided we
were appointed by the solicitors and reported to them.
Appointment
Final appointment was confirmed on Wednesday but
the initial report was required the following Tuesday for the
acquirers visit to the UK.
Initial instruction letters were drafted and the
target contacted to arrange timings. All records were relatively
local but the farms were in Lancashire. It was agreed with the
client that the initial report would be based solely on a local
visit and a review of the auditor's files.
Work
Review of records and enquiry of management was
undertaken on the Thursday and Friday with the review of auditor's
files occurring on the Monday. The report was emailed to the
solicitor Monday night ready for the client meeting on the Tuesday.
The report highlighted areas that the purchaser
needed to be aware of and we were requested to visit the sites
in Lancashire and complete the report accordingly.
Resolution
Whilst there are still issues underlying the capital
nature of the deal, the quick response on business related issues
that were raised allowed the client to appreciate the business
that was being bought and the limitations that it faced was
valuable in assessing the transaction.
The total timescale from appointment to issuing
the final report was 21 days.
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