Here you will find clear and useful information to enhance your understanding. We offer not only our perspectives, but also frequently asked questions and our answers to them. In addition, we have compiled a glossary of terms for your convenience. Our aim is to provide understandable and practical information so that you can quickly have a say on DD topics. With our clear and practical information, you will be well prepared for the challenges that come with investments.
Our glossary is in its construction phase and we aim to add more and more terms over time.
these are business service providers specialized in mergers and acquisitions (M&A) or investment issues, offering guidance and expertise in strategic corporate transactions and investments. Common areas include transaction advice, valuation, financial modeling, due diligence, business analysis, etc. This encompasses professionals such as accountants, tax advisors, valuation specialists, lawyers, environmental specialists, M&A advisors, etc.
these are assets or possessions representing value and can be traded. This includes assets such as stocks, bonds, factories, ships, and real estate, as well as other assets such as royalties, patents, machinery, and inventory.
Directives obligating EU member states to establish rules to prevent money laundering and terrorist financing, including client due diligence and reporting obligations.
A competitive bidding process where multiple potential buyers compete simultaneously for a purchase, often resulting in a higher sale price.
Investigation into an individual’s or entity’s history, credentials, and reputation.
A fee paid if a proposed transaction falls through. In a reverse break fee, the buyer pays the seller if the transaction fails due to certain circumstances.
An investor who buys securities with the intention of holding them for a long-term period.
The composition of a company’s debt and equity used to finance its operations and growth.
The Corporate Sustainability Reporting Directive (CSRD) is a European legislative proposal aimed at increasing the transparency and comparability of non-financial information from large companies and listed corporations.
A directive requiring companies to subject their activities to a thorough assessment of environmental, social, and governance (ESG) aspects as part of their due diligence process.
Investigation into the identity, background, reputation, and financial history of a company’s customers, partners, or suppliers.
Financial records prepared on the completion date of a transaction to determine the final purchase price based on the actual financial situation of the company.
The final due diligence examination conducted after a preliminary agreement is reached, intended to verify the provided information and identify any remaining risks.
Cyber due diligence evaluates an investment’s cybersecurity strategy and how they maintain the privacy of company and customer data. This process helps dealmakers identify vulnerabilities and address critical gaps
Dutch legislation containing rules regarding contract law, corporate law, business law, and labor law, among others.
Dutch law establishing rules regarding competition and market operation, including prohibitions on cartel formation, market division, and abuse of a dominant market position.
This is an investigation and analysis process conducted before a transaction or investment takes place. The goal is to gather all relevant information about a company, assets, or investment opportunity to assess risks, opportunities, and value.
Digital due diligence assesses both financial and non-financial digital assets, analyzing large-scale, digitally retrievable information using data analytics and machine learning algorithms.
A valuation method that calculates the present value of expected future cash flows.
A valuation model that estimates a stock’s price based on its future dividends discounted to the present value.
Dutch tax legislation establishing rules regarding taxation on dividend payments.
A payment structure where a portion of the purchase price depends on the future performance of the acquired company, such as achieving certain financial goals.
Earnings before interest, taxes, depreciation, and amortization; a measure of a company’s operational performance.
ESG due diligence assesses environmental, social, and governance (ESG) risks, liabilities, and opportunities for an investment. This may help identify and mitigate potential risks around reputation, regulatory challenges, and financial impacts.
A period during which the seller exclusively negotiates with one buyer and does not consider other offers, usually stipulated in an agreement.
These are businesses or organizations that produce or offer goods and services to make a profit. Enterprises play a central role in the economy and contribute to employment and economic growth.
Dutch law establishing rules for environmental protection and management, including licensing requirements, environmental impact assessments, and enforcement procedures.
The functionality of a DD process is largely determined by the availability of time, money, and expertise. The higher the functionality, the more time, money, and expertise need to be deployed.
A ‘Fund of Funds’ is an investment fund that invests in other investment funds instead of directly in individual securities. It allows investors to achieve diversification by exposure to different funds and strategies.
Investigation into the financial health and performance of a company, including analysis of financial statements, financial reports, cash flows, debts, assets, and liabilities.
The moment when all financing conditions are met, and funds are made available for the completion of a transaction.
Dutch legislation overseeing the financial sector and establishing rules regarding capital markets, financial services, and the supervision of financial institutions.
The arrangement of fees that an investor or client pays for financial services.
European legislation regulating the protection of personal data and applicable to the processing of personal data within the European Union.
Investigation into the health and safety practices, procedures, and performance of a company to identify and manage potential risks to employees, customers, and the environment.
Investigation into the personnel structure, labor relations, employee benefits, personnel policies, and compliance with labor laws and regulations.
Best practices for private equity fund managers, created by the Institutional Limited Partners Association.
An investment is the allocation of financial resources or other resources with the aim of achieving future benefits. An investment also entails risks that require careful consideration.
A global organization focused on advancing private equity investor interests.
In economics, this refers to problems, challenges, or topics of importance that require attention, such as policy issues, regulatory issues, or business issues.
Investigation into intellectual property rights, such as patents, trademarks, copyrights, and trade secrets, to assess the value, validity, and protection of a company’s intellectual property
A document providing detailed information about a company for sale, often used in merger and acquisition processes. It includes financial data, business strategies, market conditions, and other relevant information.
A document presenting an investment opportunity to potential investors, detailing the project, management team, financial projections, and proposed investment structure.
A document summarizing the key points of a proposed investment, including financial performance, market analysis, risks, and expected returns.
A process of verifying the identity, suitability, and risks associated with a client.
A document capturing the parties’ intention to complete a specific transaction. It is usually non-binding but contains the key terms of the intended agreement.
Acquisition of a company using a significant amount of borrowed money to meet the cost of acquisition.
An investor in a private equity fund with limited liability and no active role in management.
The legal document that outlines the terms and conditions of a private equity fund.
A committee representing investors in a private equity fund, offering guidance and oversight.
A pricing mechanism where the purchase price is based on the balance sheet of a prior date, with all cash flows from that date until the transaction’s completion accruing to the buyer.
The timeframe during which an investor cannot withdraw their investment.
The deadline by which a transaction must be completed. If the transaction is not completed by that date, either party can withdraw without penalty.
Investigation into the legal structure and history of a company, including ownership rights, contracts, legal disputes (including potential litigation), regulatory issues, and compliance with laws and regulations.
These are strategic transactions where two companies merge (merger) or when one company acquires another company (acquisition). M&A plays a crucial role in restructuring companies and driving economic growth.
Rules requiring market participants to report transactions and disclose information regarding insider trading, market manipulation, and the disclosure of price-sensitive information.
European directive establishing rules on the trading of financial instruments and the operation of securities markets.
A clause in an agreement giving the buyer the right to withdraw from the transaction if there is a material adverse change in the condition of the target company.
The MKDH model analyzes decision-making processes by stakeholders based on the factors of Power, Strength, Consensus, and Feasibility. This model aids in understanding and managing the influence of various stakeholders in decision-making.
A clause ensuring an investor receives the best terms offered to any other investor in a fund.
A legally binding contract protecting the confidentiality of shared information between two or more parties, preventing sensitive information from being disclosed without permission.
A clause stipulating that a seller or employee may not compete with the company they have sold or left for a specified period.
A clause stipulating that a seller or employee may not approach or hire employees of the company for a specified period.
A bidding process where the seller exclusively negotiates with one potential buyer.
Operational due diligence assesses operational aspects of the target, including the quality of the assets, the state of the infrastructure, the efficiency of the operations, and the technology in use.
Ensuring ongoing business operations during disruptions.
A cyclic management model for continuous improvement.
Fees tied to the performance of an investment or portfolio.
Provisions in an agreement requiring certain conditions to be met or actions to be taken between the signing of the agreement and the completion of the transaction.
A structured project management method standing for PRojects IN Controlled Environments. It provides a framework for project management with processes and principles to effectively and efficiently manage projects
A document outlining the steps and schedule for a sale or bidding process, often used in competitive bids to inform involved parties about the process.
Dutch legislation establishing rules for, among other things, client due diligence, reporting obligations, and the identification of unusual transactions.
Evaluation based on non-numerical attributes, such as management quality and market position.
Evaluation based on numerical data, like financial ratios and performance metrics.
These are potential hazards or negative outcomes that may occur in an investment or business activity. In economics, risks play a crucial role in determining investment decisions and implementing risk management measures.
Rules or laws governing business practices and financial operations.
Investigation into compliance requirements, regulations, and legal obligations applicable to a company or transaction, with special attention to sector-specific regulations and national and international laws and regulations.
Approval required from regulatory authorities to complete a transaction, such as antitrust approvals.
A retainer is a fixed fee paid periodically by a client to a service provider to secure their availability and prioritized access to their services over a specified period. This arrangement is common in professional fields such as legal services, consulting, or project management.
The tendency to prefer lower-risk investments over high-risk ones.
The process of identifying, assessing, and controlling risks in an investment or business.
Steps taken to reduce or control exposure to potential losses.
A contract outlining the expected level of service between provider and client.
Agreements between fund managers and specific investors, granting special terms.
These are individual investment funds that directly invest in securities, assets, or other investment opportunities, as opposed to a ‘Fund of Funds’.
A legal contract outlining the terms for the purchase and sale of shares between the seller and buyer.
An agreement among a company’s shareholders regulating their rights and obligations, as well as the management and operation of the company.
The practice of having personal financial stake in an investment, aligning interests.
Strategic due diligence evaluates the strategic objectives of the transaction, analyzing market trends, competitive positioning, and growth opportunities.
Long-term investment strategy involving the allocation of assets in a diversified portfolio.
A buyer looking to acquire a company for strategic purposes, such as synergy or market expansion.
Preparing for the transfer of leadership within an organization.
Synergy and separation due diligence considers the costs and benefits of mergers and demergers that need to be factored into the dealmakers’ valuation thesis.
Benefits achieved when companies merge or collaborate, leading to greater efficiency.
Short-term adjustments in asset allocation based on market conditions.
Investigation into the tax position, tax returns, tax obligations, tax risks, and opportunities for tax optimization of a company, including both direct and indirect taxes.
Investigation into the technical infrastructure, technological assets, patents, intellectual property, and technological capabilities of a company.
The manner in which a transaction is arranged, including the legal, tax, and financial aspects determining how the transfer of ownership and obligations will occur.
The practice of being open and clear in business and investment practices.
A metric that measures a company’s sales relative to its assets or other financial elements.
Determining the current worth of an asset or company.
The process in which the seller conducts due diligence before the sale, to identify potential issues and facilitate the sales process.
Thoroughly evaluating an individual, company, or investment for suitability or risk.
An online repository for secure storage and distribution of documents during due diligence processes, often used in mergers and acquisitions.
Warranties are statements and assurances given by the seller about the state of the company. Indemnities are obligations to compensate the buyer for losses resulting from breaches of these warranties.
Strategies aimed at protecting and maintaining an individual’s or institution’s assets.
Our FAQ database is under construction and we invite everyone to simply ask questions so that the database fills up by itself.
Yes, the introductory meeting is free regardless of the time required, provided the travel time (one way) is less than two hours. For longer travel times, travel costs and possible accommodation costs will be charged.
No, the service excludes any form of activity that falls within the exclusive competence of, among others, asset managers, investment advisors, lawyers, accountants, notaries, insurance brokers, real estate agents or other regulated professional groups.
No, only persons or companies established in Europe can be clients, where an assignment is always subject to Dutch law.
No, the activities do not fall under the Wft because they do not involve investment advice and/or asset management.
The test provides insight into the necessary commitment of time, money, and expertise for your due diligence (DD) process. The more complex the project, the more resources you need for effective execution. This result helps you understand in advance what your investment demands in terms of planning, costs, and required expertise.
Pieter is happy to share substantiated experiences and results, using practical examples that showcase his added value. Check out his LinkedIn profile for a comprehensive overview of his background.
Pieter is glad to connect you with business contacts who are willing to share their experiences. This provides additional insight into the quality of his work. Due to the confidential nature of his services, practical examples are only available anonymously. The privacy of his clients always comes first.
Pieter believes in the power of a diverse network. Depending on your project, he brings together the right professionals to achieve the best results. For DD projects, he carefully selects specialists for specific tasks to ensure top-notch quality.
Pro-Diligence is happy to collaborate with your own business service providers. In addition, Pieter has built a well-curated network of financial, legal, and other specialists. This allows him to assemble a flexible team that understands and supports your specific needs.
Pro-Diligence operates completely independently. Pieter personally selects the right specialists from his network, tailored to your project. This way, he maintains control over the DD process and delivers objective and reliable advice.
The standard hourly rate of Pro-Diligence is €125 excluding VAT, applicable to both fixed-price and hourly projects. Depending on the assignment, additional costs may apply. Every agreement comes with a clear and transparent pricing structure, arranged in mutual consultation. For project management, a retainer is possible, and a success fee can be negotiated for a results-driven approach.
Pro-Diligence
Reeënspoor 5
3871 JR, Hoevelaken
The Netherlands
KVK number: 92812415
VAT number: NL004979736B39
