Validation of data obtained from seller
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In some instances, we know that obtaining data itself might be a challenge. Even if we obtain data, what are some best practices to validate the data so obtained?
Probably, an acquiring company requests the seller to promise it is true on the contract (Representations and Warranties). Also, I’ve just heard W&I insurance is getting popular.
It really depends on what type of data you are going to validate. Normally, public company’s information has some degree of transparency to the general public and open more data through the paid sources. To validate private company’s data will be challenging. But still, there are ways to get around such as investigate from their counterparts including suppliers, customers, business partners, and consultants. Design specific forms or questionnaires for the “outskirt” type DD. Then matching what the finding with Data room.
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