Commercial Due Diligence (CDD)

View this page in: Español

Introduction

Decision-making a relating to sales /investments is a complex process for the parties involved in the transaction. It usually includes the mobilisation of important financial and human resources accompanied by a high level of uncertainty as to the actual result of the operation. This uncertainty is linked to factors such as regulatory changes, the evolution of competitive dynamics, price and cost trends , etc.

The aim of a commercial due diligence (CDD) is to reduce this uncertainty through an exhaustive understanding of the value drivers and their future projections. At PwC, CDD is part of an integrated due diligence , which includes a financial and legal due diligence and is aimed at reducing uncertainty in all aspects of the transaction by providing an independent and detailed business evaluation.

PwC has a team of experts in carrying out CDD with extensive sector specialisation who provide an independent and detailed evaluation of the transaction from a market viewpoint. In the last year alone, we have carried out more than 25 operations .

Potential problems

Failure to carry out the relevant market analysis can entail :

  • Not understanding the drivers that will guide the future development of the company.
  • Errors in market forecasts and their reflection when forecasting income, expenses and cash flows.
  • Failure to detect any potential upsides or risks adjacent to the transaction not envisaged in the business plan.

Impacting directly on the valuation of the transaction and the post-deal and therefore on the success of the operation.

How we can help?

  • We identify the company’s value drivers in accordance with its position within the market.
  • We reduce uncertainty regarding the development of the company in its market, providing verified analyses and realistic scenarios (analysis of offer, demand, competitive positioning,…)
  • We identify possible risks, upsides and opportunities not envisaged in the business plan.
  • In short, we improve the quality of decision-making, helping to mitigate the risk associated with the transaction.

Look at Strategy & Operations solutions