2. INTRODUCTION
•Due-Diligence (DD) is an analysis and risk assessment of an
impending business transaction.
• Careful and Methodological Investigation of a business
• It is basically a “Background Check” to make sure that the
parties to the transaction have the required information
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3. The DD Process
• Conducting DD is a Merger or acquisition requires a sense of the whole
as well as of all the key parts
• The DD phase of any acquisition- the study of the risk that deal poses
which can make the difference between success and failure
Many a deal looks good on the back on the envelop looks bad in a spreadsheet.
• Acquisition must face all the fact even worst case scenarios. This is why DD
must be considered in conjunction with other acquisition activities and goals
including strategic planning, valuation, financing structuring and most
important changing the future of the company with all new risk and
opportunities
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4. An obvious question that arises is: what order of diligence is Due-Diligence ,
in that séance
DD to a decision stands outside this entire hierarchy.
More in depth the following statement will abundantly clear the idea;
Diligence is a relevant term including of exact definition what would amount
to DD under one state of fact would fall absolutely short of it under
another and different state.
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5. Due-Diligence
The DD M& A is a process whereby investors/buyers and their advisors conduct a comprehensive
investigation and analysis of their target company. In aspects such as business, financial, legal,
operations, technologies and environment;
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6. Why DD is badly Done
DD is usually badly done. The reason is threefold;
1. It is usually left to the last minutes
2. The aim of DD are not well understood
3. Fear and greed in the way of a properly executed process
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8. DD Valuation, Negotiation and Agreement
• DD process allows investors to assess risk involved in the transaction and understand
the business of the target for the valuation
• Negotiation of the pricing and the definitive agreement will be based on the DD.
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