July 11, 2019 at 7:32 pm #88807
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?August 3, 2019 at 7:45 am #92018
Josh Liang Wee OoiParticipant
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.August 29, 2019 at 6:05 pm #93706
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.September 10, 2019 at 8:01 am #94651
Ang Pek HowParticipant
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.October 22, 2019 at 1:42 am #97479
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.January 18, 2021 at 8:35 pm #116345
Amy Stutzman FortnaParticipant
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.February 3, 2021 at 7:32 am #116731
I think it depends on the size of the acquisition and the relationship between the two parties.February 11, 2021 at 10:52 am #117026
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.February 26, 2021 at 7:28 am #117631
Edwin Ng, CFA, CAParticipant
Really good inputs from all.March 1, 2021 at 8:02 pm #117717
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.
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