Due Diligence · Medium
Due diligence before acquiring a business stake
The review revealed undisclosed obligations, litigation claims and overvaluation of selected assets.
Situation
An investor was preparing to acquire a stake in a business. The seller provided a financial model and presentation, but several risks were not disclosed.
Risk signals
unresolved obligations to counterparties
litigation claims missing from deal materials
revenue dependency on a limited number of clients
overvaluation of selected assets
Result
The client revised the valuation, changed the transaction terms and added protective provisions.
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