Bridging The Gap- The Financial Diagnostic Due Diligence Service

The European Commission recently announced that Europe is facing an ‘Innovation Emergency’ as independent research shows that European businesses are falling behind Asian and American counterparts in terms of new investment and patents. While it is true that numbers are low compared to world markets, we have witnessed a significant increase in the number of recent deals completed since 2007/2008.

Over the last few months, there has been a significant increase in global M & A deal volumes, with private equity deals involving consolidation in the manufacturing and health sectors, divestiture of downstream assets in the energy sector, mega mergers and divestiture of non-core assets in infrastructure and technology. Sadly, there is a widening gap in the health sector left by a combination of factors- including government policy on healthcare and an aversion of the more typical VC to invest in high risk businesses, which corporate backed VCs and strategic investors are now bridging, according to research by EP vantage.

In spite of the sector switch, many analysts predict that this year will be a strong one for M& A activity, and in the last quarter, we have seen a strong period with quite a few flagship deals being publicised, some of which e-FM has been reviewing. This trend proves that buyer confidence is returning, albeit slowly.

To support potential investors, funders and non-execs, e-FM has recently launched its ‘Financial Diagnostic Due Diligence Service’. This is an in-depth Financial Director Diagnostic/ Due Diligence review for non-execs and funders on target companies which will supply investors with information to enable the validation of financial claims made by management of the businesses and reveal potential pitfalls or missed opportunities of proposed plans.The final report will include a list of key findings and valid recommendations as well as a detailed conclusion with a financial analysis explaining the feasibility of e-FM’s recommendations and its impact on the company. A transition plan can also be proposed to enable the target company to implement some or all of the recommendations over an interim period.

This service is already generating interest in the private equity / venture capital market . The financial diagnostic is only a part of the full offering targeted at the Venture Capital market, as in addition to pre- due diligence support, the company also offers commercial and operational support after investment (post due diligence)and ongoing support in every other phase up to exit level, where required.We look forward to continuing to provide clients with strategic and financial management diagnostic advisory services on corporate transactions, and to help bridge the ‘innovation gap’ by supporting the investor and the investee.

For more information about our due diligence service, please click on the service summary below. You can also click here to email us or call 01582 516300 http://www.efm.uk.com/

The Financial Diagnostic Due Dilience Service