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Due diligence

Due diligence: An ECFO due diligence is a deep-dive investigation into the operations of a company with the goal of verifying its economic substance and identifying risks to which perspective future owners would be subject.

ECFO’s approach to due diligence focuses on building independent data sets from disparate information sources and cross-referencing them to compile an internally-consistent picture of the economics driving the company and the risks it faces going forward. The multidisciplinary ECFO due diligence team uses a wide range of methods to form its conclusions, from drill-down on accounting and tax documents to modeling of factory or office processes to statistical analysis of past resource use, depending on the demands of the particular project.

Traditional due diligence checklists and financial statement analysis are used to underpin a more dynamic observation-driven approach, giving the ECFO team the flexibility to develop a narrative about the company which focuses in on the information that will have the most significant impact on the proposed transaction while still ensuring that all key verifications and reconciliations are completed.

The result is a due diligence report which covers the overall economics of the company, its operations, as well as accounting and tax. In addition to informing a basic “go / no-go” decision, an ECFO due diligence report recommends ways to lower risk in a transaction and can form the foundation for a posttransaction “playbook” in the event that the investment goes forward.

Multi-pronged due diligence: In a transaction involving a choice of one of a number of potential investees, due diligence can be performed using a phased approach, whereby ECFO pre-screens several companies for high-impact items and “deal killers” and uses these to eliminate or prioritize others for further diligence.

Follow-on transaction support and integration services: ECFO offers a variety of transaction support services to ensure that the investment goes smoothly and that synergies for which the transaction was made in the first place are actually captured.