Project Background

An internationally renowned auto parts manufacturer (hereinafter referred toACompany) plans to acquire an auto parts enterprise in China (hereinafter referred toBcompany), to expand its market share and influence in China.BThe company is a professional manufacturer of automobile engines, gearboxes, chassis and other core components. It has multiple production bases and R & D centers, and has long-term cooperative relations with many well-known automobile manufacturers at home and abroad.AThe company commissioned Champu Consulting to provide it with business investment due diligence services to assessBThe value and risk of the company to support M & A decisions.

Customer pain points

Company A needs to have a comprehensive understanding ofBInformation on the company's business status, market position, financial status, legal risks, etc., to determine the feasibility and reasonableness of the merger. At the same time,ACompanies also need to know.BThe development trend, competitive landscape, policy environment and other factors of the auto parts industry in which the company is located to evaluate the market opportunities and challenges after the merger. DueAThe company is not familiar with the Chinese market and lacks relevant data and professional knowledge. Therefore, it needs to use the professional capabilities and resources of Shangpu Consulting to provide it with a comprehensive, in-depth and objective due diligence report.

Project Purpose

The purpose of the project at Champ Consulting is to provideAThe Company provides due diligence services in the following areas:

Business due diligence: analysisBthe company's products/Services, Customers/Supplier, Market/Competition, Technology/Innovation, management/situation of the team, etc., to assessBThe company's core competitiveness and development potential.

Financial due diligence: reviewBThe company's financial statements, audit reports, tax documents and other information, analysis.BThe company's financial position, profitability, cash flow, asset quality and other indicators, assessment.Bfinancial risk and value of the firm.

Legal due diligence: inspectionBThe company's industrial and commercial registration, equity structure, major contracts, major litigation, intellectual property rights and other legal documents, analysis.BThe company's legal compliance and legal risk.

Industry due diligence: study the development history, market size, growth drivers, policy environment, competitive landscape and other information of the auto parts industry, and predict the future development trends and opportunities of the industry.

Research object

In the course of due diligence, Champu Consulting mainly collects information in the following ways:

Review documentation: by sending aBThe company requests relevant information and obtains external information through the Internet, industry magazines, databases, etc.BA preliminary understanding of the company and its industry.

Interviews with relevant personnel:BAll levels and functions within the company, as well as intermediaries (e. g. accounting firms, law firms), clients/Supplier/Telephone or face-to-face interviews with competitors and other relevant personnel to gain in-depth understandingBThe company's business status, financial status, legal risks, etc.

Enterprise Field Survey: ThroughBThe company's production base and R & D center for field visits, view.BThe company's physical assets, products and inventories, etc., are evaluated.BThe company's production and operation capabilities and technical level.

Project Content

According to the Champ Consulting CompanyAThe company's needs, developed the following due diligence:

Business due diligence content:

The basic situation of Company B: including the company's history, organizational structure, shareholding structure, and background of major shareholders.

Products of Company B/Service: including products/Service types, specifications, quality, price, technical level, innovation ability, etc.

Customers of Company B/Vendor situation: including customers/Number, type, distribution, cooperation mode, cooperation duration, credit status, etc.

Market of Company B/Competition: including market capacity, market share, market demand characteristics, market growth potential, number of competitors, types, advantages and disadvantages, etc.

Technology of Company B/Innovation: including the size, structure and capability of the technology research and development team, the proportion of technology research and development investment, the number, type and progress of technology research and development projects, and the number, type and value of technology research and development achievements.

Management of Company B/Team situation: including the background, experience and ability of management personnel, the relationship between management and employees, the number, structure and quality of employees, staff training and incentive mechanism.

Financial due diligence content:

Company B's financial statement analysis: including profit statement, balance sheet, cash flow statement, etc., analysis.BThe company's revenue structure, cost structure, gross margin, net margin and other key financial indicators, evaluation.Bprofitability and efficiency of the firm.

Company B's cash flow analysis: including net cash flow from operating activities, net cash flow from investing activities, net cash flow from financing activities, etc., analysis.Bthe company's cash inflows and outflows, assessingBThe company's cash flow stability and solvency.

Company B's asset quality analysis: including inventory turnover, accounts receivable turnover, fixed asset turnover, etc., analysis.Bthe firm's asset use efficiency and recycling capacity, assessingBrisk and value of the firm's assets.

Company B's financial forecast analysis: according.BCompany's historical data and future plans, build financial models, forecastBThe company's revenue scale, profitability, cash flow, etc. for the next three years, evaluateBThe company's future development potential and value.

Legal due diligence content:

B company's industrial and commercial registration situation: inspectionBA copy of the company's business license (or three certificates in one), articles of association and amendments (or minutes of shareholders' meetings), register of shareholders and certificate of registration of changes in shares, etc., confirmBWhether the company's registration information and shareholding structure are legal and valid.

Major Contracts of Company B: InspectionBCompany and customer/Supplier/Competitors/Major contracts (e. g. sales contracts, procurement contracts, technology transfer contracts, etc.) signed by intermediaries, etc., to confirm whether the contracts comply with legal provisions and industry practices, whether there is a risk of breach of contract or dispute, and whether they involve significant rights and obligations or the distribution of benefits.

Significant Litigation by Company B: InspectionBWhether the company has or may have major litigation, arbitration, mediation, administrative punishment and other legal disputes, confirm the cause, nature, progress, results, impact, etc. of the dispute, and evaluate.BLiability and Losses of the Company.

Intellectual Property of Company B: InspectionBThe company owns or uses patents, trademarks, copyrights, trade secrets and other intellectual property rights, confirm the validity, integrity, exclusivity, etc. of intellectual property rights, and evaluateBThe firm's intellectual property value and risk.

Industry due diligence content:

The development history of the auto parts industry: combing the development history of the auto parts industry from its birth to the present, analyzing the main stages and characteristics of the development of the industry, and summarizing the main drivers and constraints of the development of the industry.

Market size of the auto parts industry: According to authoritative data sources at home and abroad, statistics of the auto parts industry market capacity, market share, market growth rate and other data, analysis of the industry market size trends and regional distribution characteristics.

Growth drivers of the auto parts industry: analyze the internal and external drivers of growth in the auto parts industry, including auto production and sales growth, auto technology upgrades, auto consumption upgrades, and auto environmental policies.

The policy environment of the auto parts industry: analyze the main policy impacts of the auto parts industry, including policies and regulations, standards and regulations, and support measures at the national and local levels.

The competitive landscape of the auto parts industry: analyze the degree and mode of competition in the auto parts industry, including industry concentration, market share, product differentiation, price competition and so on. At the same time, a brief introduction to the main competitors in the industry, including their basic situation, products/Service characteristics, market position, advantages and disadvantages, etc.

Future development trends and opportunities of the auto parts industry: Based on the analysis of the current situation and influencing factors of the auto parts industry, the main trends and opportunities for the development of the industry in the next few years are predicted, including market size forecasts, technological innovation directions, changes in consumer demand, and policy support.

Project Value

Champ Consulting isAThe company provides a comprehensive, in-depth and objective due diligence report forAThe company provides strong support for M & A decisions. Through due diligence services, Champ Consulting providesAThe company brings the following values:

HelpACOMPANY COMPANY KnewBthe company and the industry in which it operates,AThe company provides data support and professional advice for determining M & A objectives and strategies.

HelpACOMPANY EVALUATIONBvalue and risk of the firm,AThe company sets the price and terms of the merger and acquisition to provide a reference basis and bargaining chips.

HelpACompany foundBstrengths and potential of the companyAThe direction and suggestions are provided for the integration and development of the company's planning after the merger and acquisition.

HelpAThe company enhances its understanding and confidence in the Chinese market forAThe company's long-term development in the Chinese market has laid the foundation.