3 ms·
It's common practice at this transaction size to skip the level of due diligence that you're proposing. The reasons being: 1) It takes a lot of time to do thi
by fairity 4y ago
It's common practice at this transaction size to skip the level of due diligence that you're proposing. The reasons being:
1) It takes a lot of time to do this level of diligence
2) Companies aren't comfortable sending over their entire customer database to a purchaser before a deal is closed. And, if they send over a sampling, it doesn't solve for your use case.
2) There are indemnifications included in the final sale agreement that firmly protect the buyer from cases of fraud like this, so it's not actually necessary from the buyer's perspective.
- jacquesm 4y agoThat's very much incorrect. I do this for a living and I guarantee you that nothing gets skipped at a deal this size and it doesn't have to take all that long either, depending on how heavy the team is. As for indemnifications: those are worth about as much as the paper they are written on when you're dealing with a fraudster, the money is probably long gone by the time you activate those clauses.
- fairity 4y agoYou're claiming that for deals in the $80-120m range, most of the time, the seller sends over their entire database of customer contact info before the deal is closed? I'm sure it happens in some fraction of deals, but to claim a majority seems absurd. That said, you probably know best - I speak from a sample size of 4.