What is the size of acquisition to outsource DD to a third party?
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The decision to outsource due diligence (DD) to a third party often depends on the complexity and size of the acquisition rather than a specific dollar amount. However, for acquisitions typically valued above $50 million to $100 million, organizations often consider outsourcing DD to specialized firms. This ensures thoroughness and expertise, mitigating risks and ensuring a comprehensive assessment. Smaller deals might also benefit from third-party DD if they involve significant complexities or unfamiliar markets.
I think dd should always be outsourced to third parties unless we are talking of a really small deal.
The decision to outsource due diligence to a third party isn’t solely determined by the acquisition size. Instead, it hinges on the internal capabilities of the acquiring company. Key factors to consider include:
1) Available resources: Do you have sufficient personnel dedicated to due diligence?
2) Skillset and experience: Does your team possess the necessary expertise for the specific acquisition?
By evaluating these aspects, you can determine whether outsourcing is the most efficient and effective approach.
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