Due Diligence for Overseas Subsidiaries in a Limited Time Frame
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If the target company in an M&A deal owns numerous subsidiaries across different countries, how can we efficiently conduct due diligence within a limited time span?
Geographical distance, language, culture and practises often pose challenges in a DD process. Good planning and adequate resources are of course very important. However, the seller’s ability to provide timely, adequate and consistent information impacts on the process and it should be considered what is the optimal strategy to make the seller aware of anticipated DD needs and to agree on the process. A virtual data room can be of great help as it allows simultaneous work across geographies, and it can also be possible to find an external DD provider which can support in all/several relevant geographies with a similar concept.
In addition to the suggestions already posted, it could be advisable to have a diagnostic of significance/materiality of each entity and country and exposed risk of each one (e.g.: tax a regulatory environment are complex and may generate not yeat materialized risk of tax authorities assessment) and try to focus on those jurisdictions engaging appropriate experts.
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