Aubridge was engaged by two U.S. investment firms (“Client Firms”) to perform financial and operational due diligence on a Chinese manufacturer based in Zhejiang Province, China. The Client Firms were in negotiations to acquire a U.S. company, and the Chinese manufacturer was a key exclusive supplier to the company. The Client Firms wanted to better understand the Chinese manufacturer’s financial controls, performance, and operations in order to decide whether to make the investment and at what valuation. Aubridge immediately deployed a team to meet with senior management of the Chinese company and to assess the company’s operations and manufacturing capabilities.
- Financial due diligence - Aubridge addressed issues relating to the company’s accounting systems, financial performance, transfer pricing, payables to suppliers, royalty payments to the current owner, etc.
- Operational due diligence - Aubridge assessed the effects of changes in raw materials pricing on the business, existing equipment and capital expenditure requirements, worker satisfaction, management quality, potential effects of sales increase on operations, etc.
Aubridge's due diligence addressed the key questions and concerns of the Client Firms and gave them the confidence to move forward and close the transaction on the best terms.