vrijdag 13 november 2020

Digital Due Diligence (DD) and Pre-DD performed on 1700 hectares agricultural land and a farm by PBS in Romania

After selling large plots of agricultural land during 2003-2007 we shifted from sales to due diligence and used our expertise to evaluate farms and agricultural land in Romania. Since then we performed a due diligence almost every year in a classical way. We also used our expertise for share deals with factories that were bought by investors as we active in Romania since 2003.

The DD was always done with a classical approach: we go on-site during 7-10 days. After this we write our report and conclusions and provide the investor (buyer) with a printed report and attachments. On average we produce around 10-20 cm of paperwork nicely printed and presented as the main report and conclusions with corresponding attachments. The duration of the works is around 2 to 3 weeks.

“Due to the COVID19 we had to re-think our business model and we started to work from a distance as per October 2020.”

The first digital DD case was a farm with 1700 hectares of land in ownership in Romania.

How does it work ?

  • We start with an NDA and a mandate from the investor (buyer) that is interested in the share deal.
  • We build the initial frame that we will use for a structural approach of the DD.
  • We start to ask questions to the seller and the seller opens a data room.
  • The seller is giving a reply to the questions that we ask and he puts the answers in his shared data room as task 1, task 2, task 3, …
  • We open a separate data room for the buyer and insert the tasks from the data room of the seller into the structure that we defined.
  • As we build the data room for the buyer we start to write the report per topic according to the structure that we created. We refer to the data room as proof for each topic. The buyer can follow the progress online as the report and the corresponding proofs are available in the data room.
  • We have skype conferences every 5 days in order to explain the findings and progress and with the seller and separately with the buyer.
  •  After 10-15 days we start to structure the report and structure in the data room of the buyer and adapt the structure if needed because of extra points for investigation found during the DD.
  • After maximum 21 days, the final report and final data room are ready.
  • We have the final skype with the buyer and the buyer can decide on the future steps to acquire the shares of the targeted company.

What are the advantages of a digital Due Diligence ?

1.     We do not have to travel to Romania

2.     We can work more accurate as we do not lose time on site with the seller

3.     We write better reports and we can go into more detail

4.     In general, it is much faster compared to the classical method that we used before

Example of some of the topics handled.

1.     Register of commerce and monitor of Romania

2.     Organizational chart

3.     Employees

4.     FinData

5.     Own Equity

6.     Shareholder loans

7.     Bancary loans

8.     VAT & Taxes

9.     Buildings

10. Land for agriculture

11. APIA

12. Irrigation plan and irrigation

13. Depreciation of all assets

14. Commercial contracts clients & suppliers

15. Law cases

16. Organic farming

17. Permits

18. Subvention files

19. Observations accountancy

20. Fusions

21. General conclusions

More info mail frjacobs@telenet.be

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