Due diligence is a vital pre-acquisition exercise in which the buyer checks the health of the target business, its operations and the accuracy of any information provided by the seller.

Enquiries should be made of NHS England’s local area team, doctors’ surgeries, nursing homes and whether any third party relocations or NHS contract applications are pending, all of which may adversely affect profitability.

The buyer should obtain the last three years’ annual accounts and FP34s to accurately quantify historic prescription sales, as well as current management accounts, which will reveal any recent business deterioration.