External due diligence advisors

This topic contains 12 replies, has 13 voices, and was last updated by  FAHAD ALQAHTANI 1 week, 2 days ago.

Viewing 13 posts - 1 through 13 (of 13 total)
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  • #88807

    Christoffer Balieu
    Participant

    From your experience, in what part(s) of the due diligence process is it particularly advisable for a buyer to engage an external DD advisor? Do you think the answer varies between countries or industries?

    #92018

    Josh Liang Wee Ooi
    Participant

    In my view some elements would be industry specific. For example, if it involves possible land contamination issues then an external DD advisor would definitely be necessary. In other respects, I think the typical parts of areas requiring external advisors would be legal and perhaps financial/tax. Even with an in-house team, my experience has been that external consultants are still employed – partly because the internal resources may be taxed for time and many not have all the expertise needed, but also unfortunately because many companies or investors need some aspect of the deal rubber stamped by a third party to reduce exposure to potential lawsuits. It of course varies also with the type and size of organization involved.

    #93706

    Anne Becker
    Participant

    I think it will also depend on the size of the acquisition. We’ve used just in house personnel and we’ve used outside law firms and finance/tax advisors.

    #94651

    Ang Pek How
    Participant

    I think that the answer varies across countries and industries as it depends on the level of expertise and experience of the in-house team. I think it would be crucial to engage an external due diligence adviser to perform financial and commercial due diligence in default as an independent opinion on the financial standpoint and valuation of the target company are crucial in the acquisition exercise. Other areas could be perform by the in-house team if the team possessed sufficient expertise and experience. The size of the acquisition could be another factor as large acquisition requires additional time, effort and resources. Engaging an experienced external adviser to assist the acquirer in the acquisition process would be meaningful as it would not be efficient for the acquirer to deploy its internal resources given that a large acquisition process are time consuming in nature.

    #97479

    Fathurrahman Latama
    Participant

    In my opinion, it depends on the size of the acquisition, the expert available on the buyer side, whether the buyer knows the way around the industry, different countries operated of the buyer and the seller, etc.

    #116345

    Amy Stutzman Fortna
    Participant

    I think this depends on the experience and availability of the in-house team. If you are entering a new, highly complex industry for which there is little in-house expertise, engaging an industry expert would make sense.

    #116731


    Participant

    I think it depends on the size of the acquisition and the relationship between the two parties.

    #117026


    Participant

    In my opinion, the size of the industry and relative size of the target contributes to the main consideration of hiring an external advisor. For countries, it might apply if it pertains to a complex cross border deal.

    #117631

    Edwin Ng, CFA, CA
    Participant

    Really good inputs from all.

    #117717

    Hannah Barber
    Participant

    I personally think it depends on the size of the acquisition and the current team you have in place to perform due diligence. Do you already have financial analysts on staff? In-house legal, etc. In terms of a large acquisition, the financial and commercial due diligence piece are extremely important to engage with a third-party, if you do not have an M&A team in place. Again, all depends on the size.

    #120605

    Markus Gustafsson
    Participant

    In the Tax DD in my opinion. Especially when doing M&A in companies with operations in different countries with different tax laws.

    #121119


    Participant

    Agreed that it really depends on the experience and expertise of the in house team. Eventually. I think the board or CEO will have decide how much reliability they can put on their in house team and they have to justify the risks and benefits arising the engagement of either internal or external team of expert. If resources allow, I would think the top management will engage external expert on most of areas and use the internal team as independent check on their works.

    #121191

    FAHAD ALQAHTANI
    Participant

    Definitely engaging advisors are key to most transactions, yet countries and organizations vary. In some organizations they have the legal, financial and technical organization and their dependence on external advisors are limited. In my opinion, engaging external advisors are very important as they will look into the transaction form their specialty point of view with an advisory role in mind.

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