July 31, 2020

Due Diligence: Prepared Sellers Stand Out in Buyer’s Market

This Norton Rose Fulbright blog stresses the importance of sellers being prepared for buyer due diligence if they want to successfully pursue a transaction in the current environment.  Here’s an excerpt:

As due diligence is designed to comprehensively evaluate an entity and, in particular, uncover risks and liabilities, it is imperative that target companies ensure that their corporate records are complete and accurate prior to entering into due diligence with a prospective buyer.

While your corporate records may be the last thing on your mind as you have successfully grown your business, they will be the very first thing scrutinized by a prospective buyer during due diligence— incomplete or disorganized corporate records will make your organization appear unprofessional at best whilst signalling that a deal with your company poses a higher degree of risk and potential liability for the buyer. Accordingly, your discipline and attention to corporate records is the one variable in your control that can impact your company’s ability to secure an M&A deal.

The blog goes on to offer specific tips to sellers on putting their records in order and making them accessible in advance of a sale process.

John Jenkins