Tagged: Due diligence timing
- This topic has 22 replies, 22 voices, and was last updated 7 months, 3 weeks ago by
Xin Yi Ho.
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December 19, 2023 at 1:16 am #93128
Vishal Patel
MemberDuration depends on the type of company (Publicly traded vs private). Prior detailed conversations on how the company is structured and what synergies exist between the two.
December 19, 2023 at 9:32 pm #93240Robert Winslow
MemberI believe the complexity of the transaction is also a factor in the dd timing, particularly as pertains to the age of the asset. We recently sold an asset that was a very old operating mill. With such an asset it was challenging at times to find some of the original contracts that had been signed, land surveys, equipment service logs etc. The info was all available, it just took both sets of lawyers (buyer and seller) longer than usual to find and verify everything.
December 28, 2023 at 5:50 am #93718Issa Fallouh
MemberThe approach varies depending on the company’s size, type, locations, among other factors. It is determined on a case-by-case basis
January 6, 2024 at 7:21 am #94491Tee Kiat Kenneth FOO
MemberIt depends on the size, complexity, of the deal.
If its a small companies, couple of weeks should be sufficient.
If its a multi billion dollar deal, a year or so should be sufficient. However, if due to anti trust issues and it drags beyond 1.5 years, it might not be ideal to drag this deal.
January 10, 2024 at 7:29 pm #94704Ricardo Chanis
MemberIt depends primarily on any self imposed deadline for closing agreed to by the parties. Neither the buyer nor the seller are interested in dragging matters too into the future. Usually what takes more time is loading and updating all relevant documentation up to the data room. After that the seller and the buyer will have a expectancy of the time required for the DD independently of the size of the data room, so the buyer will need to hire the necessary advisors (legal, accounting, etc.) capable of conducting the DD in such mutually agreed time. An extension clause in usually agreed to by both seller and buyer to provide for additional time to conduct the DD process under certain circumstances or as agreed to be mutually agreed by all parties.
January 12, 2024 at 9:28 am #94806Jamie Morgan
MemberI believe it also depends on the risk profiles of the parties involved. A risk averse buyer will likely create a more drawn-out DD process. Similarly, the risk associated with the target, and industry the target operates in, is likely to play a part. Sufficient attention should be given to mapping the initial risks associated with the target, or its industry, to inform factors such as likelihood and severity of potential risks factors. Of course, this picture can develop as more is learnt during DD.
January 16, 2024 at 10:43 am #95036Pedro Garibi
MemberProbab ly it depends on the complexity of the target and on the resoruces (human and financial) you want to deploy. If you have legal, accounting and tax advisors and their full temas, you could probably go faster. Additionally, if all relevant information is digital, probably temas can work more efficiently instead of travelling to the target offices or facilties. In average it could probably take 3-4 months and usually is defined by the target and target´s advisors in order to get the binding offer as soon as possible.
Regards
PedroJanuary 17, 2024 at 12:10 pm #95213Xin Yi Ho
MemberDepends on the size of the target. If the target is small, the scope of due diligence will be smaller. Certain parts like IP DD, HR DD or property DD can be place aside.
But if the target is big, especially there is a take over, full scope of DD is needed.Of course there are other factors like requesting documents from seller or waiting the seller’s response takes time.
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