Does onsite visit really helps in Due Diligence?
- This topic has 33 replies, 34 voices, and was last updated 3 months, 2 weeks ago by
.
-
Posts
-
It can hold exceptional importance in certain situations, especially in the case where a targets products are produced by an external manufacturing partner.
The established contracts and IP ownership may be readily available in the data room but the actual conditions of a facility, and their true processes, can be critical. The cost and time to take a flight could not only help uncover optimization opportunities that could be implemented post deal but avoid a surprise in quality, cost, or reputational risk. Even in the case where internationally recognized auditor data may be available a visit by the buyer, who knows the product / industry process exhaustively, can see things others following a checklist may miss.
Yes, 100 percent this can help due diligence. It allows for the face-to-face interactions rather than just in the VRD. It will also allow you to see the day-to-day operations and as others have said see if the culture fits what you are seeing. You can also obverse if items do not match what is said, large amounts of inventory sitting on shelves, no inventory etc…
Yes, it is important. It serves as an opportunity to understand the business, the seller better and build a more physical relationship which will be helpful in future correspondence.
Beyond the items mentioned, I believe that one of the key purposes of the onsite visit is to mitigate post-closing issues. In the industrial sector, the sooner the condition and state of the acquired assets are understood, easier these matters can be addressed in a sales and purchase agreement.
- You must be logged in to reply to this topic.
