How to complete a transaction ?
Validating an opportunity
The due diligence process is an essential step in the validation of an opportunity for a business. It allows mitigating risks in a transaction.
There are mainly four types of risks:
- market risks are the risks of losses due to changes in the market value of a portfolio of financial instruments, or of goods or services. The management of these risks needs to do in the short term, and regularly.
- counterparty risks are characterized by the fact that your counterpart (client, supplier, stakeholder) should bear a risk of default. This failure may relate to all or just a part of the goods or services at stake in the contract your organization has with this counterpart.
- operational risks are losses due to errors, systems or processes, or due to external events, such as the risks of damage to production facilities, technological risks, climate risks, risks environmental, health risks, etc …
- reputational risks mean the risk of losses due to deterioration of a company’s brand image. This devaluation of the image can be linked to social scandals, health or environmental. The reputational risk is difficult to quantify because it must take into account the information propagation speed and the potential impact on public opinion.
Before finalizing a transaction, it is essential to take into account all these risks and measure them.
Our due diligence and risk mitigation reporting system is a valuable and immediately actionnable decision support tool.
We believe that risks can be leveraged as opportunities, if known, mastered and anticipated.