There are three main reasons sell-side financial due diligence projects (quality of earnings) are being done.
- Sellers want to present their Company in the best possible light to increase value.
- It gives confidence to the Buyer that someone other than the Company and M&A advisor has analyzed the financial data of the Company.
- Time kills all deals—the sell-side financial due diligence speeds up the process because we try to fix any financial issues before the target goes to market and all the data we ask for is stored in the M&A advisor’s VDR (virtual data room).
When is a good time to do a sell-side due diligence?
We recommend starting the process two-to-three years before the planned exit event. This provides plenty of time needed to identify and fix any issues before going to market.
But at a minimum, we would like to be performing our procedures three months before the target goes to market.
For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.