[Rahul Mane]

Along with budgeting for due diligence, it’s essential to allocate resources for addressing risks identified during the process. Rather than walking away from a deal due to risks, we should focus on understanding their impact and exploring mitigation strategies, as this ensures informed decision-making and preserves the potential value of the acquisition.

[Nigatu Balcha]

It may range from 1% to 5% of the transaction value. In some cases the complexity the transaction, the continuity of DD task , the business environment where we are ( competitors price), and number of DD task at hand may vary the budget for DD we charge/ the buyer company willing to pay.

[Pierre-Paul Lavoie]

With the responses here from 1% to 10%. Are there general brackets to go by to separate in ranges?

[Seraphina Ho]

Agree that DD cost would typically be about 1-5% of transaction value. But question is, would you normally include the DD spend in your valuation, which would then either affect your returns or the price you can offer to the seller? The amount of DD to be done depends on how prudent the buyer is. Does that mean a more prudent buyer would always be less competitive and end up not securing the transaction? How would you strike a balance?

[John Quinones]

Define the scope based on the size, industry, and complexity of the target company, then benchmark costs based on deal size. Also, estimate internal vs. external costs and look for opportunities to leverage internal expertise.

[Jonathan Zhang]

It should be factored given the scope of work, urgency of delivery and not the size of the transaction. Of course, bigger quantums would generally reflect bigger complexities but there must be a limit to where a % on the transaction amount is capped. I have also seen where the fees are subject to the quantified benefit actually materialised.

[Mishal Alsaud]

Approx 1-5% of the transaction value is a reasonable

[John Sitler]

Working for a strategic buyer, the budgets are first estimated by the respective internal teams. For example, the engineering team would determine whether they have the internal resources to do the requisite technical DD, or if there is a portion that needs to be outsourced, and a range of cost they would expect. If the price is too unknown, we submit a request for interest to shortlisted providers, and get an initial indicative quotation range to work with. We then put together a budget, and iterate this with our management to get the right balance of cost vs de-risking. The process can be slow, but ultimately results in a budgetary framework the evolves with the industry / deal in an ever-optimizing fashion, and also provides substantive management buy-in.

[Saad AlOtaibi]

1. Define Scope Early
Clarify what areas will be covered: market, financial, legal, technical, ESG, etc.
Decide if external consultants or internal teams will be used.
2. Estimate Costs by Category
Typical cost categories include:
External advisors (consulting firms, legal, financial analysts)
Data acquisition (market reports, customer surveys)
Travel & logistics (site visits, stakeholder meetings)
Internal resources (time allocation, opportunity cost)
3. Use Benchmarks
For mid-sized deals, due diligence costs typically range from 0.5% to 2% of deal value.
For large or complex deals, this can go higher depending on regulatory and geographic factors.
4. Build Contingency
Include a 10–20% buffer for unexpected findings or extended scope.
5. Track and Review
Monitor actual spend vs. budget throughout the process.
Adjust provisions if scope changes or additional risks are identified.

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