Due Diligence Process

By Tom Cobery
In August 26, 2016

Assuming that you are on the selling side of an acquisition, you are in for a fun filled sixty days. After signing a Letter of Intent, the Due Diligence (DD) begins. The DD is usually quite extensive and may include as many as twelve different areas of concern. The obvious are: Legal; Financial; Tax and Regulatory; Operations; and Information Systems. However, other areas of concern are: Risk Management (Insurance); Human Resources; Logistics (Facility); Procurement Policies; Sales and Marketing; Environmental and Health, Safety and Security.

I have seen a DD list with over 1,300 questions that needed to be addressed by the Seller. In the financial arena, a Seller should expect to provide a minimum of three years of Balance Sheets, Profit and Loss Statements, Cash Flow Statements, Monthly Financials for the past two years and Tax Returns for the last five years.

Very often a Data Room is set up to store all the documents needed to answer a Buyer’s request. The Data Room is usually maintained offsite by a third party. The Seller and Buyer, as well as approved third parties, such as banks and financial consultants are given access to the Data Room. Links are set up so that the approved parties can access information needed to determine that the requests have been adequately addressed. A gatekeeper is normally assigned to upload all the data.

As you can see, this is a very stressful time, getting the information is stressful and time consuming, usually created in a short period of time.

If you want to chat, give me a call at 703-837-1095 or E-mail me at tcobery@idealliance.org.

Tom Cobery

Dealing with the day-to-day needs of running a busy printing operation often leaves company leaders little time to plan for the future of their enterprises on their own. Tom works with chief executive officers and senior management executives in the Tag and Label Industry to develop growth opportunities through strategic transactions, new markets, or new service opportunities. Available for consulting on individual projects, he can also be engaged to serve as an Advisory Partner, helping executives guide their company into the future, serving as an impartial sounding board for ideas, and working with them to set the right course for continued growth and greater profitability. Tom’s personal experience as a Tag and Label Industry company president and chief executive officer, plus his extensive networking with other industry executives through his volunteer leadership activities with the Tag and Label Manufacturers Institute (TLMI) give him a unique perspective on the tough issues today’s company leaders face in this specialized segment. Companies engaging Tom will find his insight and independent advice an invaluable asset in helping them achieve their growth and profitability goals. More than a consultant, Tom Cobery wants to be your trusted Advisory Partner.

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