Case Study 1

Due Diligence Company Acquistion

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Financial Due Diligence: Making Informed Choices

Financial due diligence is a key process that helps potential buyers thoroughly understand a deal, assess risks, and align it with their goals. This process is like doing thorough research before making a smart decision.

Scenario

Consider ABC Sdn. Bhd. (anonymous for privacy), a Malaysian company formed in 2018, focused on making aircraft tunnels. Initially leasing from DEF Sdn. Bhd., an interesting opportunity arose in 2019. DEF Sdn. Bhd. offered to sell their business, including real estate and assets. This offer matched ABC Sdn. Bhd.'s aim to get property and assets.

Challenge

ABC Sdn. Bhd. faced a choice between:

  1. Buying DEF Sdn. Bhd

  2. Getting property and assets separately

Solution

To address this, ABC Sdn. Bhd. asked KTP for help. They performed financial due diligence, assessing property, plants, and equipment. This involved checking asset values and reviewing legal documents and history. The result was a detailed report.

The report showed important issues:

  1. Significant deals with related parties.

  2. Outstanding loans.

  3. Possible liabilities.

  4. Other findings...

This due diligence gave ABC Sdn. Bhd. crucial insights, helping them decide whether to acquire DEF Sdn. Bhd. or get assets on their own.

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