Take Control of Your Financial Due Diligence to Attract More Potential Buyers
Prepare in advance to meet expanded financial due diligence requirements.
Every company that prepares for a significant financial event will be challenged with the process of financial due diligence. Unfortunately, too many companies wait until the final run-up to exit to get organized. The haste of this possible “fire drill,” coupled with the resource-intensive effort of executing the transaction according to the rigorous due diligence checklist, can increase the risk of incomplete disclosure, drive up direct and indirect costs, and result in missteps that damage the deal. The best approach, especially in today’s risk-averse climate, is to begin the process as far in advance as possible, consult with experts to develop a targeted M&A strategy along with the executable due diligence checklist, and put it to the test before entering the market.
Create the best possible presentation of your company’s financial due diligence materials.
All required documents are uploaded into an online document repository, where authorized viewers can simply log in, from the convenience of their own office, and easily search for relevant due diligence information. This simplifies the process and empowers potential buyers to conduct a more thorough financial due diligence. The virtual data room itself becomes a marketing tool that presents the asset for sale in a highly organized, professional manner.
Conduct a “readiness” assessment.
To begin, sellers need to conduct a “readiness” assessment to determine what will be necessary to bring their company to market. This includes taking steps to:
- Assess the right time to go to market, given the company’s sales and profitability trends, combined with market developments.
- Prepare and validate financial records to successfully complete the due diligence checklist.
- Arrange a customer and market analysis.
- Set up a three- to five-year strategic plan and financial forecast.
- Review resolution of legal, operational, management and environmental issues.
- Develop and summarize marketing and sales plans, including a new business pipeline.
Invite multiple bidders.
There is no better way to drive up asset valuation than to engage multiple bidders in the deal. Traditionally, this basic strategy has been more difficult to achieve in a paper-based due diligence environment, which, by its very nature, limits multi-buyer participation and the ability to effectively negotiate on several concurrent fronts.
However, in a secure virtual data room like Merrill DataSite, multiple buyers can all review the same electronic documents for financial due diligence from anywhere in the world, at the same time. Sellers can conduct simultaneous, confidential due diligence cycles and host an unlimited number of bidders without extending transaction time, impeding access or breaching bidder confidentiality.
Accelerate financial due diligence review.
Since prospective buyers can simply log into a secure Web browser at their convenience, scheduled visits to a physical data room are no longer necessary. The entire process takes place much more quickly, and buyers’ travel time and costs are either completely eliminated or greatly reduced.
A trusted partner
Merrill DataSite Virtual Data Room (VDR) is an online deal room that optimizes the due diligence process by transforming the traditional paper data room into a secure online data room, accessible via the Internet. Merrill DataSite offers a secure and highly efficient method of sharing critical business information for electronic due diligence in M&A advisory, banking M&A, mid market M&A review, transfer of small business ownership when selling a company, document warehousing, mergers and acquisitions due diligence, succession in family business or when buying a business, IPO and secondary offerings, asset purchases, venture capital due diligence, bio tech licensing, commercial and corporate real estate ventures, liquidations, bankruptcies, financial restructure, liquidation analysis for bankruptcy, corporate debt restructuring, preparing for exit strategies, and many other transactions that require.
Merrill Corporation has been a trusted provider of secure information services to Fortune 500 companies in the financial and legal industries for nearly 40 years. Since 2002, Merrill DataSite has empowered 1,6 million visitors to perform electronic due diligence on thousands of transactions totaling trillions of dollars in asset value.
It is at the core of Merrill DataSite’s effort to share ideas and practices that can help organizations expand opportunities. Download and read a variety of documents for free, such as international surveys, summaries of field knowledge practical guides, and Case Studies of our clients and partners, from the DataSite Knowledge Center>>
