Cascade Asia’s vendor screening & due diligence services deliver current and privileged intelligence on key stakeholders and target investments in Southeast Asia.
We identify risks for clients within a broad range of business transaction needs: from mergers and acquisitions, joint ventures, financings, licensing and distributor partnerships to private equity, venture capital and other investments. Our on-the-ground approach and deep roots in Southeast Asia yields a level of insight and context that enables our clients to make critical decisions on their investments with greater clarity and confidence.
Red Flag Review
Cascade Asia’s analysts will conduct a global compliance check and identify relevant corporate charter documents where available. We will also conduct a thorough media scan in English and relevant local language going back seven years for any adverse coverage.
Public Record Review
Building upon the Red Flag Screen, the Public Record Review includes litigation, arbitration, bankruptcy, regulatory, labor, tax and law enforcement checks as a standard feature. This would also include a comprehensive profile of the target company or individual.
Possible add-on features: As an advanced service, we can collect physical copies of relevant documents, conduct a thorough examination and analysis as a part of this advanced service.
Some clients may need closer scrutiny of high-risk targets that requires a Reputational Review. Building on information uncovered from the Public Records Review, the deep dive deploys our local human intelligence resources with an aim to provide the client with rich, first-hand reputational assessments and to frame any allegations in the proper context.
Possible add-on features: As an advanced service, we can collect physical copies of relevant documents and conduct a thorough examination and analysis.
Investigative Due Diligence
For deals requiring a more detailed, panoramic view of embedded risks, Cascade Asia tailors and executes a deep dive strategy to address the client’s specific needs.
The interwovenness of politics and business, the elaborate webs of family investments, the widespread use of questionable business practices among several other layers of potential risks in Southeast Asia often necessitates tailored response due diligence. This is particularly true of transactions involving a merger or acquisition, a joint venture, market entry or anti-corruption, FCPA, U.K. Bribery Act investigations that need to go beyond the databases and delve into the integrity, reputations, operations and history of specific targets and their affiliates.
Cascade Asia’s team in Southeast Asia includes former criminal investigators, fraud investigators, financial analysts, forensic accountants, multi-jurisdictional attorneys, former business journalists and former law enforcement professionals who are local to the region. This distinct local blend across disciplines ensures our clients receive the right level of detail they need.
Cascade Asia’s investigative due diligence addressed issues such as:
- Civil & criminal litigation
- Regulatory violations
- Political/government connections
- Industry reputation & track record
- Business relationships & alliances
- Legitimacy of operations & assets
- Verification of negative allegations
Approximate time frame: Depends upon client specifications.
Commercial Due Diligence
Our commercial due diligence team has completed over US$8 billion worth of deals.
Why commercial due diligence?
Commercial due diligence investigates the key factors that will influence the target’s profitability in the next 1-5+ years, including:
- How fast is the market likely to grow?
- How are customer needs changing?
- What are the key drivers of competition?
- How competitive is the target’s offering and sales & distribution versus key competitors?
- What is the outlook for the target’s market share and margins?
- What is the quality of the target’s management team?
- What key risks does the target face and what mitigations are in place?
Private equity firms have long used commercial due diligence and most corporates now realize the value that it brings in avoiding risk, identifying future strategic projects and speeding integration.
Why Cascade Asia?
Cascade Asia is the partner of choice for commercial due diligence in Southeast Asia among private equity firms and corporations. Here's why.
- Proven experience – We have completed commercial due diligence on over US$8 billion of deals.
- Rich insights – Our team works in-country to access frontline consumer behavior and competitive dynamics in a process that typically includes insights from local industry insiders.
- Industry diverse – Our team has deep experience in a variety of industries including FMCG, mining & mining services, manufacturing, logistics, media, utility services, banking, financial services and palm oil.
- Tailor-made – Our senior team will work with you to customize the scope of the commercial due diligence to avoid the cookie cutter approach.
- Cost-efficient – Using the one team to conduct reputational and commercial due diligence permits us to pass these savings on to you.
Cascade Asia has an earned reputation among private equity firms and corporations as being the partner of choice in Southeast Asia. Our record speaks for itself but it’s our approach that got us there. This includes:
- mobilizing our local, in-country experts to gather rich business intelligence and insights among industry insiders
- addressing the broad market attractiveness, competitive environment and target commercial capability as well as focusing on 1-3 key specific questions / risks
- tailoring the scope of the project to meet the breadth and depth required while being structured to meet the budget
- immediately flagging any potential “showstoppers”
On request we can also:
- investigate and value potential synergies
- forecast indicative inputs for your deal model such as market growth, market shares and potential pricing/margin trends
The second largest juice and dairy player in a developing market was being investigated by a potential private equity acquirer. Instead of being a strong going concern as represented in the Investment Memorandum, commercial due diligence revealed that the target had:
- immediate cash flow challenges
- a heavy reliance on third party distribution to small corner stores;
- low marketing spend and brand awareness versus competitors, with limited direct sales to supermarket chains
- a significant stock loss issue with large amounts of stock transferred between warehouses going missing or being spoiled
However, the due diligence also revealed:
- the market was beginning to grow rapidly driven by the emerging middle class and diets were changing as students returned from overseas education
- the imminent market entry of a breakfast cereal major was tipped to fuel dairy market growth
- a small consumer survey commissioned as part of the due diligence showed that the company’s brand was viewed as high quality with a strong preference to purchase
- production and product quality were of high standard and managed by a capable and experienced factory team
Despite the poor initial outlook, plans to mitigate the risks by investing in improving brand awareness, developing a larger and more experienced sales team, consolidating warehousing and improving internal controls allowed the investment to proceed. The deal team credited commercial due diligence as a key factor in allowing them to negotiate a low valuation but still purchase with confidence.
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