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In addition to the analysis of past business development, the focus of due diligence should be on the following factors:
In order to achieve the best possible result for the potential investor and to cover the need for urgent action in crisis situations, the transaction team should include both transaction and restructuring specialists. Also the potential buyer should have a sufficient level of restructuring know-how or have it covered by engaging external consultants. Distressed companies often involve diverse internal weaknesses, such as reporting and management systems not adjusted to the size of the company and missing internal controls. This means that in addition to a new strategic orientation and adjustment of the product portfolio, often there also arises the need to adjust internal processes and structures. If the pitfalls are overcome, the distressed company may become a genuine asset.
Christian Hellbardt
Partner
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