Due Diligence by the Target Company

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This topic contains 2 replies, has 3 voices, and was last updated by  Korath Wright 3 months ago.

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  • #105225

    Thant Coleman
    Participant

    I would offer that Due Diligence by the target company should be just as extensive as that of the acquirer.

    What are your thoughts?

    #107328

    Surabhi Khanna
    Participant

    Absolutely. Due diligence by target helps them understand whats the maximum value that can be realized from the acquisition. It also helps them put a better case and deal terms for the acquisition.

    #107454

    Korath Wright
    Participant

    Yes, I would agree due diligence should be just as stringent when completed by the target, as it is when completed by the buyer. However, the target likely does not know the details of the buyers strategy who they are completing the due diligence for. The strategy would influence the materiality and focus areas for the due diligence, and likely means the seller still needs to complete their ‘strategy specific’ due diligence. The target may have an idea about the types of strategies potential acquires would deploy, and could build out due diligence around these, however it maybe at a higher cost than necessary.

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