[Maggie]

Is it determined by the size of target or acquiring companies?

[Ahmed Alhishwan]

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.

[Filippo Sabbioni]

I think dd should always be outsourced to third parties unless we are talking of a really small deal.

[Benjamin Ervin]

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.

[Dom Bourgeon]

It depends on your company.
If you handle only a few deals a year, sure, most of it should be handled to a 3rd party if not all.
However, my recommendation on the matter is either you have M&A and PMI specialists in house dedicated to this -> then in house because you will have the resources to do it but if you don’t have the former but you are in a company doing several deals, then have one with PwC for example, to have an M&A expert but using your internal resources. If is the latter, same thing.

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