Book review in business acquisition

During a business acquisition, a proper due diligence is indispensable. The investigation (also called due diligence) provides clarity. Not only about the financial situation. But also about fiscal risks and commercial strength of a company.

At Loor Legal & Partners, we have extensive experience with book examinations. We are happy to help you conduct the investigation properly.

The interest of buyer and seller

For both buyer and seller, proper research is important. Every business has strengths and weaknesses. When these are clear in time, the seller avoids later liability claims. And the buyer knows exactly what is going on within a newly acquired company.

Topics of research

  • Finance
  • Fiscal matters
  • Legal concerns
  • Commercial value and vitality
  • Strategic value
purchase agreement

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Timing of the book examination

An investigation requires effort and time. The right time to start is when there is sufficient trust between parties to reach a deal. Initial negotiations for an acquisition will have been completed by then.

This concluding phase concludes with the drafting of a letter of intent. Because the serious interest has been expressed and recorded, the step to providing insight into confidential data can be taken. The preconditions for the book examination are then in place.

It is worth noting that due diligence is often included as a condition in the letter of intent. Are the results of the investigation satisfactory? Then the acquisition goes ahead.

See also the information from the Chamber of Commerce and Tax Office.

The nature of the research

The book examination gives the buyer a chance to verify information provided. How thorough the examination should be depends, among other things, on the complexity of a business and the relationship that buyer and seller have.

The survey thus provides a strong foundation for a company's valuation.

The value of research

In initial conversations about business acquisition, it is difficult to paint an objective picture of a company. The seller may (consciously or unconsciously) paint too favorable a picture of things. The due diligence removes the personal interpretation of the state of affairs. It is therefore indispensable in follow-up negotiations.

Putting all the cards on the table also allows for clear agreements on mutual obligations. Good research takes time. But it prevents future disappointments and the risk of loss of trust between buyer and seller.

Conducting an audit requires expertise. Our lawyers will be happy to assist you. Please feel free to contact us to discuss the possibilities.

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