Don’t Dilly-Dally During Due Diligence

Insights by Robert Fiske.

From time to time, we like to reiterate some key points regarding the conduct of a deal process as it can be so important to ultimate success.

Before I go on, I should say that preparation is (unsurprisingly) absolutely key. Once into the nitty gritty of a deal process – especially during the due diligence phase – you will need to be prepared for significant demands on your time. However, the more prepared you are in the first place, the easier you will find this.

For those who are not clear what happens at this point, you will be sent one or more ‘due diligence questionnaires’ with dozens of questions covering all aspects of the business – and you need to respond to them all. You will also need to populate a data room with supporting evidence (eg. contracts, accounts, forecasts, leases and many other documents besides). Firstly, knowing where all these are will greatly help this process (and perhaps stating the obvious, as will having them in a digital format). Secondly, responding to the questions and uploading the supporting documents to the data room swiftly will not only streamline the process but will also give confidence to the buyer that they are acquiring a well-run business. If the buyer perceives the process is like getting blood out of a proverbial stone, it really won’t help – and in extreme circumstances, could jeopardise the whole deal.

If you would like to find out what else you can do to help a sale progress and also make your business more attractive to buyers, please join our live webinar in a few weeks’ time. “How To Get Top Value For Your Tech Business” is taking place on Thursday 19 June and is aimed at owner-managers of software, IT services and related tech businesses who are thinking about selling. Find out more here www.prismcorporatebroking.com/webinar and if you receive our newsletter check the email for a discount code.

Last month we released the latest issue of our M&A report for the software and IT services sectors. This includes our analysis of recent market trends, results of our owner-managers’ survey and an update from a former client. For your free copy of our M&A report, please reply back to our newsletter email or complete this form: www.prismcorporatebroking.com/report