ESG & Corporate Acquisitions
Business takeovers involve screening many aspects of the company, such as its financial statements, employees and agreements made. Within this framework, there is also an increasing focus on ESG. Why? Because the way an organisation has implemented ESG says a lot about its future-proofing.
Attention to the various ESG factors has a positive impact on the company. It leads to risk mitigation and value creation of the company. Recent acquisitions have shown that companies with a clear ESG strategy fare better in the market and are sold at higher multiples than companies that pay little attention to ESG.
ESG compliance can therefore increasingly be a dealbreaker. If risks are uncovered during due diligence that show that the organisation is not undertaking ESG responsibly, this can lead to the purchase price being reduced or even the deal being compromised.
There is also a certain trend within acquisition financing. Banks are increasingly requiring ESG standards to be met before granting credit. If the standards are not met, and banks nevertheless provide credit, high interest rates are often charged. In addition, ESG also plays a role in company valuation. As mentioned, organisations with a clear ESG stamp are sold at higher multiples. Therefore, the importance of ESG can no longer be denied. What does this mean for you? Is your organisation ESG proof?
What can we do for you?
Our team offers to map out for you which due diligence obligations your organisation faces or how ESG can be factored into your organisation's valuation. We would be happy to help you on your way.