Japan’s Financial Due Diligence: A Key to Successful M&A Deals

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As foreign investors consider making a move in Japan’s thriving business landscape, thorough financial due diligence is crucial to ensure a smooth and successful merger or acquisition. Our team provides comprehensive Financial Due Diligence services tailored to the unique needs of international clients.

The Importance of Due Diligence

The importance of due diligence cannot be overstated when it comes to determining the acquisition price of a target company. Two key areas of focus are:

• Existence of Assets: A thorough review of assets is essential to ensure that they exist and are properly valued.
• Completeness of Liabilities: Reviewing liabilities helps identify any potential risks or hidden costs associated with the target company.

Streamlined Options

While a full scope of due diligence is often the norm, we also offer simplified options that focus on specific items such as:

• Accounts receivable
• Inventories

This streamlined approach can save time and costs without compromising the quality of the report.

Our Financial Due Diligence Process

Our Financial Due Diligence process typically involves seven key steps:

1. Obtaining Basic Information: We obtain basic information about the target company to begin our due diligence.
2. Requesting Required Documents: We send a list of required documents to be reviewed to the target company.
3. Preliminary Preparations: We conduct preliminary preparations before visiting the company’s premises.
4. Field Visit: A field visit is an essential step in our due diligence process, allowing us to review the target company’s operations and financial records firsthand.
5. Preparation of Report: We prepare a comprehensive report in Japanese or other languages that provides clients with a thorough understanding of the target company’s financial situation.
6. Final Report: We issue a final report that summarizes our findings and recommendations for the client.
7. Reporting Session: For urgent requests, we offer a summarized report option and can hold a reporting session to accommodate tight deadlines.

Timing and Options

Typically, our Financial Due Diligence services take around 3 to 6 weeks to complete. However, for urgent requests, we offer:

• A summarized report option
• A reporting session to accommodate tight deadlines

For more information, please don’t hesitate to contact us.