Due diligence should help a buyer or investor decide whether to proceed, on what terms and with which post-closing priorities. Its value is not the length of the report. It is the connection between evidence, financial consequences and decisions. A useful review distinguishes confirmed findings from unresolved questions and explains how each material issue affects the investment case.

Define the transaction question before requesting documents

A control acquisition, minority investment and asset purchase create different questions. Start with the proposed structure, commercial rationale, funding plan and information available. Agree the scope and materiality with the relevant financial, legal, tax and operational specialists. No review can eliminate every risk, and missing information should be visible rather than treated as reassurance.

Build the request list around decisions. If customer retention drives value, examine contracts, concentration, renewal behavior and margins. If production capacity is central, examine utilization, maintenance requirements, permits and investment needs. A standard request list can provide coverage, but it should not replace an understanding of what makes this transaction work.

Translate findings into possible transaction responses

The exhibit links four common issues to supporting evidence and possible responses. These are not automatic remedies. Materiality, the transaction structure and negotiation determine whether an issue changes price, contract protections, closing conditions or the integration plan. Legal drafting and specialist conclusions belong with the relevant advisers.

Follow an earnings adjustment through the valuation

Assume, purely for illustration, that reported EBITDA is 10 million. Removing 1 million of non-recurring income reduces it to 9 million. An agreed 0.5 million add-back brings it to 9.5 million, but a 0.5 million recurring replacement cost takes it back to 9 million. The result depends on evidence and consistent treatment, not on whether an adjustment helps the buyer or seller.

At an illustrative unchanged multiple of 6 times, the difference between 10 million and 9 million of EBITDA is 6 million of enterprise value. This is not a recommended market multiple or a price conclusion. It shows why the earnings definition matters. Debt, cash, working capital and other agreed adjustments must still be considered separately when determining equity proceeds.

Keep cash, debt and working capital definitions consistent

An amount should not be counted twice through different adjustments. Review the treatment of overdue payables, customer deposits, restricted cash and other items with the transaction team. The appropriate classification depends on the business and the agreement. A clear schedule of definitions is often more useful than a long list of labels.

Working capital also requires a reference period that reflects the business. A single month may be distorted by seasonality, delayed payments or unusual inventory. Compare the proposed benchmark with underlying operating patterns and understand what the purchaser needs to run the company after closing.

Maintain a finding register that drives action

For each material issue, record the evidence, open questions, potential financial effect, responsible adviser and proposed response. Distinguish a confirmed liability from a possible exposure. Where quantification is not yet possible, state what information is required and who will obtain it.

Not every finding should become a price reduction. Some require a specific contractual protection; others require operational work after closing. An unresolved issue may justify delaying or abandoning a transaction, but that judgment should follow its importance to the investment case and the available alternatives.

Use the work after signing

Transfer relevant findings into the closing checklist and the post-acquisition plan. Customer retention, reporting improvements and management continuity do not become less important when negotiations end. Assign owners and review progress against the issues identified during diligence.

Lev Partners supports financial analysis and transaction coordination alongside the appropriate specialists. The objective is a decision-ready picture of the business, with explicit assumptions and practical next steps, rather than a promise that every uncertainty can be removed.

Explore due diligence services or discuss your proposed transaction.

Your M&A advisory contact

Erim N. Kargacı — Founding Partner and Head of M&A, Lev Partners. Erim leads Lev’s M&A advisory and supports owners considering investment, acquisitions or a company sale. He is also listed among Endeavor Türkiye’s mentors.

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