In acquisitions, the target company may often have business brokers or (agents) who are selling the company on their behalf. Given the extreme variance in requirements to become a business broker across the world in terms of: qualifications, skillsets, monitoring etc. As an acquirer, to what extent do you trust figures that are provided by a business broker who claims that they have conducted thorough DD on their client?
I receive regularly deal proposals from brokers. Depending on the brokers, these are fairly well prepared and allow a quick first impression of the company. Normally, the figures and financial results of the past years are consistent. On the other hand, the development potential of the company (and the valuation) are well over-estimated. An additional DD is mandatory!
I agree with some of the comments here. Business broker DD is difficult to trust as they are not incentivized to do a robust or objective DD. Definitely do your own DD as a buyer, but i would say if the target has done one round of business broker DD, it would make it much faster to conduct buyer DD as at least the basic information would have been categorized and gathered by the business broker
it seems that at the end outsourcing the work creates more work to check and the risk of bad quality of work done. however having it done by yourself might mean the DD cannot completed within the expected timeframe
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