Due diligence is a process of enquiry and investigation made by a prospective buyer in order to conﬁrm that they are buying what they think they are buying and fully understand exactly what they are buying.
The better the due diligence, the more buyers know about a target and therefore the more they know about the immediate risks they are taking on. Therefore, due diligence allows an acquirer to:
- identify issues which feed into price negotiations, and hence reduce the risk of paying excessively;
- mitigate risk in the deal by identifying areas where legal protection ought to be sought.
Due diligence is an aid to working out what contractual protection is required from the seller and what risks the buyer should steer away from completely.
A&A’s advisory team has extensive experience in due diligence services in Kenya for both voluntary and involuntary investigations.