June 6, 2023 at 1:16 am #81066Nicole CloverParticipant
Due diligence is an audit or investigation of a potential investment to confirm facts that may have a direct impact on a buyer’s decision to merge or make a purchase. During the due diligence process, research is conducted to ensure that all facts pan out before entering into a financial transaction or agreement with another party.
In a company acquisition, due diligence typically includes the full understanding of a company’s obligations, such as their debts, leases, distribution agreements, pending and potential lawsuits, long-term customer agreements, warranties, compensation agreements, employment contracts, and similar business components.June 8, 2023 at 6:24 am #81144Nazar AlbuijanParticipant
I believe it is an integral part if not the most important one to figure out if to go with that corporate transactioni or not.June 12, 2023 at 7:58 pm #81351Cheryl SchowParticipant
Yes, DD is fundamental to determining the pros and cons of acquiring a target. A thorough DD uncovers many of the risks, opportunities and potential synergies in pursuing a target. It will either validate or refute your hypothesis and help define the level of risk your company is willing to take in a given situation.June 17, 2023 at 4:38 am #81636Andrea ChiuParticipant
Yes, DD is an important component of M&A. Failing to conduct a thorough DD will impact the success of the M&A. As such, you want to consider the pros and cons of the M&A, assess the risks and opportunities and investigate the target in a comprehensive manner to avoid surprises and poor outcomes both during and after the merger/acquisition.June 21, 2023 at 7:22 pm #81776KoheiParticipant
I cannot imagine to take a decision to go for M&A without conducting DD. However, what I believe is important is to what extent we conduct DD. If targets are small and if acquirers know very well about them, then, the scope of DD can be very limited. However, the scope of DD should be extended if there are clear risks.June 29, 2023 at 12:51 pm #82510ABLAY MYNBAYEVParticipant
Yes, due diligence is the process of thoroughly investigating and assessing a company’s business, financials, operations, legal compliance, and other aspects before finalizing a merger or acquisition. It helps the acquiring company to understand the risks, liabilities, and potential synergies involved in the deal.June 30, 2023 at 12:49 am #82531Bernardo LimaParticipant
Definetely is a key part of the M&A transaction. A poor due diligence can harm the expected outcome of the deal.June 30, 2023 at 2:51 pm #82557Teo Kim HengParticipant
DD is undoubtedly is a crucial and necessary even integral part of M&A.
Having said that, DD needs to strike a delicate yet acceptable balance between full discovery and full disclosure given both are conflicting and contradictory in nature. One, the buyer, wants to know as much as possible if not everything at least things that can rendered the acquisition a “failure” while the other, the seller, wishes to ‘sweep things, particularly unwelcome or unwanted, under the carpet’. Coupled with the dichotomy of one aiming to buy at the lowest possible price versus the other determining to sell as high as possible, all these makes DD challenging, complex and very often frustrating.
Having said that, what are some mitigations, safeguards etc. can be put in place to ensure DD happens effectively and efficiently?July 19, 2023 at 1:15 pm #83369Ziad DebbasParticipant
Yes due diligence is core to the M&A process. It can be split into 2 parts the “business DD” which focuses on strategic fit, high-level financial assessment and valuation and getting comfortable about the quality of the management team. Post non-binding offer, the “confirmatory DD” starts focused on auditing and verifying financials, tax impact, legal and uncovering any skeleton in preparation to the binding offer.July 21, 2023 at 5:10 pm #83454Akrem MouffoukParticipant
It is a key part of an acquisition deal and it’s finding will play an important role in the integration plan and successJuly 21, 2023 at 10:15 pm #83465Jeferson SilveiraParticipant
Indeed, conducting a thorough due diligence process is a key and essential component. Regardless of the deal’s scale or location, every transaction should undergo a comprehensive due diligence examination. This meticulous approach allows parties involved to gain a comprehensive understanding of the potential risks, opportunities, and overall health of the target company, paving the way for more informed decision-making and ultimately contributing to the deal’s success.July 22, 2023 at 6:21 am #83473Chin Hui TeyParticipant
Yes, due diligence is very important part of the M&A.July 24, 2023 at 9:36 pm #83522Nathan HoltParticipant
Yes it is part of M&A. It’s also a time to evaluate and test integration plan assumptions in prep for a deal that ay go through.July 28, 2023 at 10:00 am #83660Lana IlchenkoParticipant
Yes, it is a very important port of the M&A. However, it’s not necessarily conducted by the M&A team, unless it already includes representatives from the Finance team. Depending on the size of the company, this element is either handed over to the Finance team or, more commonly, an external firm of accountants is hired in order to perform the DD.July 31, 2023 at 8:58 am #83711Fumiya IgarashiParticipant
Yes, it’s very important process of M&A. By setting the right value and understanding the risks (including potential ones) you can proceed to the next phase. Backgroud checks of key personnels are also important.
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