Reply To: Due Diligence by the Target Company

#38712
William Venus
Participant

I believe the key word to focus on in your due diligence question is “..as extensive.” I agree the target company should conduct due diligence but how extensive really depends on the target company leadership, culture, and future prospects. If the valuation or initial offer is at a multiple that far exceeds expectations, would a costly extensive due diligence make sense? One would certainly not want to sell to a company that is not a cultural fit and could potentially destroy value, but then again everyone has different motives (i.e. entrepreneur’s that like building but don’t like running companies.)

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