The value lens: Unlocking future success in due diligence

In today’s deal environment where market dynamics readily shift as do geopolitical impacts, deals need to be executed faster and with greater precision than ever before. Stakeholders are also calling for tangible value outcomes across a broader spectrum of the business — immediately within the first quarter of striking the deal and for years beyond.

Successful dealmakers understand that value creation cannot be a post-deal afterthought — it’s a strategic imperative that must be embedded from the very start. To unlock the full value potential of a transaction and achieve the intended objectives, due diligence must evolve to assess a broader scope of risk factors, such as ESG, digital assets and human resources, while also identifying and assessing all aspects of value opportunities.

By embedding value creation into the due diligence process, dealmakers can gain the information and insights they need to navigate any potential deal complexities and make more precise and confident decisions with greater speed. Longer-term, analyzing value can also help dealmakers achieve improved outcomes — transforming transactions into opportunities for transformational growth.

Value diligence

Realizing value in a transaction doesn’t happen by chance. It takes deliberate focus and strategic effort from the very start. Scoping out value opportunities during the due diligence phase — what KPMG professionals call value diligence — demands a rigorous, and integrated approach that involves deep sector and functional expertise, strategic line of sight and advanced data analytics to help uncover and enhance potential value.

At KPMG firms, our professionals begin value diligence with our value driver trees. Tailored to address the distinct challenges and opportunities of various industries and sub-sectors, these tools help our teams assess the key levers of value within a business that drive revenue opportunities, cost optimization and working capital improvements. For example, analyzing the sales levers of a technology company might involve assessing the number of third-party sales partners, the strength of those partnerships and the resulting sales activity and revenue.

Data-backed value opportunities

Analysis at this granular level is then validated and quantified with internal and external benchmark data that is further enhanced with insights from sector and functional specialists. Bringing it all together, we offer dealmakers deeper, more nuanced insights of a deal’s value, verifying the feasibility and resilience of opportunities under different market conditions or industry dynamics.

With such information available during the due diligence phase, dealmakers can better assess the scale of a deal’s opportunities, and determine with greater confidence, if a deal should be pursued, whether better negotiating points are needed, and ultimately set the right price.

There are other advantages too. In sell-side transactions, for example, early insights pre-exit allow vendors to implement strategic improvements that enhance the business’ financial position and overall attractiveness to potential buyers — strengthening the deal thesis and delivering tangible benefits that extend beyond the transaction itself. Executing on these prior to the deal process enables sellers to realize this value in the deal price.

Value diligence helps buyers and sellers identify and deliver “quick wins” tied to areas such as working capital cash flow release, revenue improvement or cost optimization. In a recent deal, managed by KPMG Australia, we were able to uncover product pricing upsides for a large global fuel and convenience retailer. With evidence coming out of a strategic initiative review during the sell-side due diligence phase, the client optimized its pricing approach during the transaction process. By acting early, the seller was able to enhance pricing across its network, execute operational efficiencies and enhance the overall value proposition to buyers.

Delivering value beyond diligence

Value diligence offers benefits that extend far beyond the due diligence phase. With strategic clarity, dealmakers can better prioritize and action the more critical opportunities during the integration phase, while using other insights to help shape and support longer-term growth strategies.

Realizing such value requires more than identifying opportunities. It calls for a team with the right skills and capabilities, and continuity to turn strategy into action. When the same team who uncover potential value during due diligence stays with you through delivery, they can bring greater execution certainty, consistency and speed.

Whether it’s achieving quantifiable financial gains, enhancing deal resilience, or laying the groundwork for sustainable and transformational future growth — having an team that can draw on a broader set of capabilities and work should-to-shoulder with you can help ensure that the value identified is the value delivered.

A practical framework for value diligence

Value creation isn’t an abstract concept. It’s a deliberate, structured process that requires the right tools, sector and functional experience, and value-focused approach to deliver meaningful results.

Assess value alongside risks

Approach value creation analysis with the same rigor and priority as you assess a deal’s broader set of risk factors. This dual focus transforms due diligence into a balanced process that helps safeguard against potential pitfalls, while offering a proactive strategy for long-term growth and resilience.
Assess value levers

Assess value using sector-specific value levers, validated and quantified by internal and external benchmarks, to tailor actionable opportunities to your business. Such structured and detailed analysis can help pinpoint and prioritize potential value opportunities.
Develop a value roadmap

Translate the value opportunities identified during due diligence into a clear action plan, prioritizing quick wins (i.e., integration synergies) and long-term opportunities, mapping each action against timelines and the experience required. A strategic plan can help speed up the time to value realization, at the deal’s close and beyond.
Integrate functional experience

Involve functional specialists (i.e., finance, operations, technology) to help identify, refine and deliver value creation recommendations. This can offer a more detailed and well-rounded approach that reflects the complexities of the business, while having access to the team who can help activate the opportunities.

How KPMG professionals can help

KPMG takes a value-focused approach to due diligence to help better position clients to win. We do this by bringing together global methodology and sector-specific value drivers to deliver holistic insights to enable dealmakers to make rapid, confident decisions to grow their business. This approach seeks to transcend traditional financial due diligence to assess an expanded universe of risks and rewards. Leveraging proprietary data analytics and insights, along with deep sector and functional experiences, KPMG professionals work to identify the levers that can create value across a business.

KPMG firms’ support extends beyond a deal’s close, by orchestrating dedicated teams of professionals across the globe to deliver measurable performance improvements that can help create quantifiable value across a business.