We are seeing more buyers and sellers than ever – companies are realizing that this is the best time since the dot.com era to sell. Thus, we expect 2014 to be a record year. But, one trend is emerging, whether our clients are in North America, Latin America, Europe, Asia, Africa or the Middle East: due diligence is definitely getting tougher. All regions and countries have caught up with the laws enacted in the U.S. years ago, most notably Sarbanes Oxley. Thus, business development teams from global buyers and investors are getting larger, every member with a say in the process.
Recently we had international buyer teams of 10, 13, and 20 meet with various selling clients. Such groups at one time can be very wearing on the seller, who are most often privately held firms being bought by public companies or re-capitalized by well-staffed private equity giants. We even had a situation where 59 of the various buying staff made an appearance. Luckily, not all at one time!
At Corum, after getting the best offer, our job is to help successfully guide our clients through the minefield of due diligence. Preparation (being ready for the questions), research (what will the buyer want), a well-crafted LOI, a good data room, and a short No Shop are among the steps to take you into due diligence properly. And yes, we’re there with you. Having over 11 million entries on buyers, due diligence checklists, contracts, negotiation tactics, etc. from selling more firms and educating more buyers than anyone gives us and our clients an advantage in helping control the process.
But, one thing we can’t fully control and that's just as important is how you conduct yourself. Be patient, and don’t show your temper. All too often it seems that the same questions are asked simply because there are different divisions of the buyer involved, all of them justifying their presence. You can call us in the middle of the night to rant, but don’t do it with the buyers. Remember, this is a courtship, and you are at the altar.
In summary, the wear and tear of deal fatigue is perhaps the number one transaction killer in due diligence today. Don’t let it happen to you. Be prepared, control the process, get professional help, and have an activity to reduce stress. And, be patient. This is the most important transaction of your life - it’s worth it.
Want to know more? Learn about Corum’s 8 Step Optimal Outcome process in a Merge Briefing seminar near you. The goal of this conference is help you reverse the 80% mortality rate that ‘self managed’ M&A efforts suffer, often because of today’s tougher due diligence.