Before making an investment decision, Norfund will perform a due diligence of the company. Norfund will need to obtain a thorough understanding of the potential investment, and will assess the financial situation of the company, the assumptions for the budgets and estimates for the company going forward, the market, customers and competitors, tax issues, ESG (environmental, social and governance)-related issues and the investment’s legal and corporate structure.
In addition to the company’s underlying commercial factors, Norfund will always place emphasis on the people behind the investment proposal. The partners’ ability to take the business forward and the Board and management’s ability to create growth and create a sustainable and profitable company, is a key element in any due diligence.
Norfund is reliant on the cooperation of the promoters for the due diligence, and some resources will need to be set aside. Norfund will initially request copies of a number of documents relating to the issues mentioned above, so that we can become familiar with the specifics of the investment. Subsequently, and regardless of the company’s stage of development, Norfund will always include a site visit before making an investment decision. We consider it key to get to know the promoters and the management of the company, to see the site for the production and to speak with key stakeholders that will be involved or be influenced by the investment.
By conducting a thorough due diligence and ensuring transparency in this process, Norfund aims to have enough insight to initiate valuable relationships with the promoters and create a solid foundation for a new and profitable partnership.