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Treasury and banking due diligence

Treasury due diligence reviews a target's banking, cash and treasury risks before an acquisition closes. Private equity deal teams and corporate acquirers hire FIRMA Advisory when standard financial diligence leaves banking unexamined. The outcome is a red flag report, adjustments for the deal model and a treasury section ready for the 100 day plan.

When companies bring us in

Deal teams bring us in when banking risks could affect price, structure or the closing date. These are the usual triggers.

  • The target has credit facilities, guarantees or cash pooling that may not survive a change of control.
  • A carve-out target shares bank accounts and treasury services with its parent.
  • The target holds significant cash in countries with FX controls or repatriation limits.
  • FX exposure is material, but hedging and its costs are not documented.
  • The closing date is tight, and nobody has checked how long bank KYC will take.
  • The investment case assumes banking and FX savings that need validating.

Treasury and banking red flag checklist

Every review runs through the same checklist, then goes deeper where the target's profile demands it. These are the main red flags.

  • Change of control clauses in facilities, guarantees, hedging agreements and cash pooling contracts.
  • Guarantees and pooling liabilities that tie the target to its seller or to other group entities.
  • Trapped cash in countries with FX controls, dividend limits or repatriation taxes.
  • Unhedged or poorly documented FX exposure, and hedges that must be closed at completion.
  • Bank accounts, mandates and signatories that cannot transfer cleanly to the new owner.
  • Bank KYC requirements and lead times that could delay closing or day one payments.
  • Banking cost and FX pricing that may sit above market and affect the value creation case.

Each flag is rated by its impact on price, structure, timing or the 100 day plan.

What we deliver

You receive a red flag report and the inputs your model and 100 day plan need. The table shows each deliverable and its timing.

DeliverableWhat it containsTypical timing
Cash and FX profileCash by country and currency, trapped cash and FX exposure, with the hedging in place.End of phase 1
Red flag reportFindings against the checklist, rated by impact, with evidence from documents and data.End of phase 2
Contract and liability scheduleChange of control terms, guarantees and pooling liabilities, with consent or repayment needs.End of phase 2
Deal model inputsAdjustments and assumptions for price, debt-like items and the value creation case.End of phase 2
100 day plan treasury sectionDay one banking actions, the KYC timeline and post-close priorities.Phase 3

How an engagement runs

Due diligence runs on the deal timetable, in three phases. Phase one can start on the information memorandum before data room access.

  1. Desktop review, week 1. We review the information memorandum, accounts and available bank data. Early concerns go to the deal team at once.
  2. Data room and management sessions, weeks 1 to 3. We review facilities, guarantees, pooling agreements and bank statements, then test findings with management. The red flag report follows.
  3. Signing to close, from week 3 to closing. We support contract negotiations on treasury points and plan day one banking. Findings move into the 100 day plan.

What changes for the client

Outcomes are measured in deal terms and in the speed of the first 100 days. These are the outcome types we report.

  • Treasury red flags identified before signing, rated by impact.
  • Price or structure adjustments supported by treasury findings.
  • Consents, repayments or replacements agreed for change of control terms.
  • Trapped cash quantified by country, with a plan to release or use it.
  • Closing date protected by an early bank KYC plan.
  • Day one banking actions ready when the deal closes.

Why an independent former banker

Standard financial diligence reads the accounts, but banking risk sits in contracts and bank processes. Federico Lleonart worked in cash management at J.P. Morgan and Barclays, where facilities, pooling and onboarding are handled for corporate clients.

What do deal teams miss in banking?

Change of control clauses sit in facility agreements, guarantees and hedging contracts, not in the accounts. Cash pooling with a seller can create liabilities that move with the target.

Trapped cash looks like cash on the balance sheet, but it may not be available to service new debt. FX exposure can turn a stable forecast into a volatile one.

Why can bank KYC delay closing?

A new owner triggers know your customer reviews at every bank, including beneficial ownership checks on the fund. Without a plan, accounts and mandates are not ready on day one.

How do findings feed the 100 day plan?

Each finding becomes an action with an owner and a date. Day one banking, consents and early savings go into the plan, so post-acquisition treasury integration starts on day one.

For sponsors, the same findings seed the banking review in our private equity treasury advisory work.

FIRMA Advisory sells no banking products and takes no commissions from banks. A senior treasury consultant leads the review, and legal interpretation of contracts stays with your counsel.

For consulting firms and private equity teams

Consulting firms bring us in as the treasury specialist inside financial or operational due diligence. Private equity deal teams use us directly or through their advisers, and our partner model explains how we work alongside them.

Frequently asked questions

These are the questions deal teams ask before scoping treasury due diligence. Each answer is direct.

How is this different from standard financial due diligence?

Financial due diligence focuses on earnings, working capital and net debt. Treasury due diligence looks at bank contracts, pooling, guarantees, trapped cash, FX and bank processes. It complements your financial and legal advisers rather than replacing them, and our findings can feed their reports.

How much does it cost, and how is it structured?

Pricing depends on the target's size, the number of banks and countries, and the deal timetable. Most reviews run as a fixed scope module, with optional support from signing to close. Findings can then roll into post-close work as a project. See engagement models and fees.

How long does treasury due diligence take?

A typical review takes 2 to 3 weeks from data room access to the red flag report. We work to the deal timetable and raise urgent issues with the deal team as soon as we find them. Signing to close support follows the transaction schedule.

Is the work remote or on site?

Most of the review runs remotely in the data room and through management calls. Management sessions or site visits can be attended in person where the deal team needs it. On site time is agreed in the scope. Travel is billed at cost and approved in advance.

Which regions and languages do you cover?

We review targets with operations in the United States, Europe and Latin America. Federico Lleonart works in English, Spanish, Portuguese, Italian and French, so local bank documents and management teams in those languages are reviewed directly. Multi-country targets follow one checklist.

How do you handle deal confidentiality?

Deal work follows your confidentiality agreements and data room rules. Information is used only for the review and shared only with the people you approve. Banks are never contacted about the target without your explicit instruction. Client names and transactions are never published without consent.
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Related insight: Treasury due diligence red flags lists what deal teams usually miss.

Engage

Find the banking risks before you sign.

Book a short call with a treasury consultant who knows bank contracts and onboarding from the inside. We will outline a review for your deal timetable.

Book a 30 minute call [email protected]