[Executive Summary] ➔ Quick overview of deal breakers, key valuation impacts, and Adjusted EBITDA. ↓ [Business Overview] ➔ Analysis of business models, revenue streams, and customer concentration. ↓ [Quality of Earnings] ➔ Detailed bridges showing reported vs. adjusted financial metrics. ↓ [Net Working Capital] ➔ Historical balance sheet analysis and NWC peg recommendations. ↓ [Net Debt Analysis] ➔ Identification of debt-like exposures and cash traps.
Arm the buyer or seller with leverage for the Sale and Purchase Agreement (SPA). 2. Structural Blueprint of a KPMG-Style FDD Report
: It proves the company makes the money it claims [2].
: Review of past spending and future requirements to maintain or grow the business. financial due diligence report kpmg pdf
This report is prepared solely for the use of [Client Name] in connection with the proposed acquisition of [Target]. It does not constitute an audit or review under ISAs. Reliance on this report by any third party is prohibited.
In today's deal environment, where market dynamics shift rapidly and geopolitical impacts are ever-present, KPMG has evolved its due diligence methodology beyond traditional risk identification. The firm emphasizes a value-focused approach that integrates global methods and sector-specific value drivers to deliver holistic insights.
Rather than just listing numbers, the commentary directly ties financial variances to operational realities (e.g., linking a drop in gross margin to supply chain disruptions or specific raw material inflation). 5. How to Leverage the Report for Transaction Negotiations [Executive Summary] ➔ Quick overview of deal breakers,
Address operational inefficiencies highlighted in the report during the first 100 days post-closing.
: Assessment of the target's internal control environments and data quality.
Due diligence reports serve different purposes depending on who commissions them. adjusted financial metrics
The following appendices are included:
When a company or private equity firm is considering acquiring a target, KPMG produces a . This report is designed to validate the investment thesis, identify risks that may impact valuation, and highlight deal breakers that should be considered in the Share Purchase Agreement (SPA). KPMG typically performs due diligence before the signing of an SPA, though work can also be conducted after signing when necessary.
Evaluating customer retention rates and contract longevity. 4. Balance Sheet & Net Debt Analysis
This is the centerpiece of the PDF.