I have a fairly comprehensive list of due diligence request items that we typically adjust for each acquisition. However, the list comes from each leadership workstream and our integration team often has early requests that they need answers to before day 1 integration. How do you typically handle this with your teams? Do you wait until right before day 1 to ask for additional requests, or do you include common requests for integration in the due diligence list?
It is certainly sensible to share the right amount of information well before day 1. This expedites the integration process, since a significant amount of planning can be done in advance. We had employed a “Clean team”, and it worked out well for us. It is a good practice to employ such a team, which is generally a third party.
Since they are a neutral party, they have access to confidential data and information from both sides. Both the acquirer and the target (or the two merging companies in case of a merger) share information only through this team. The clean team will sift through this information, remove anything that is confidential, and pass on the rest to the other side. This ensures too much information is not shared. Of course, the legal teams of both sides also need to approve the information being shared, since sharing too much might violate anti-competition laws.
I am in agreement with Siva on the benefits of the “Clean Team”. We had one for our last M&A that was a 3rd party vendor and that seemed to work well; however, they weren’t allowed to share that information below a certain level based on our agreement, so post-close we had to ask for it all again. We developed a list and templates that we provided to the company we were acquiring that had all the information we needed. They could fill out the items they felt comfortable with pre-close and send it to us, then day 1 would provide the rest. This seemed to work well in our case, but depending on the information you need – it might not.
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