Sell Side Due Diligence – A Whitepaper

Conducting a due diligence exercise prior to inviting investors in is widely accepted to help in preparing the company and management for the type of questions investors ask.

MerrillCorp’s whitepaper on seller side DD is a worthwhile read …though (free) registration is required.

Once a company decides to pursue a sale and has completed at least a portion of the initial, internal preparation described in Part 1 of this series, most businesses enlist the outside assistance of an investment bank in a sell-side engagement.

An investment bank, working closely with internal and external advisors–including management, legal counsel and tax and accounting experts–is integral to providing both sellers and acquirers with guidance and assistance as they move from identifying potential deal partners to ultimately negotiating a purchase
agreement, and structuring the transaction to meet applicable laws and minimise tax consequences. (Investment banks also routinely work with potential acquirers to search for and vet potential acquisition targets, in a buy-side assignment.)

Selecting the appropriate investment bank to handle any particular deal is dependent on a wide variety of factors. The first parameter rests on the size of the proposed deal; some international banks specialise in handling complex, cross-border, multi-billion-dollar deals that may be affected by laws in several
countries or regions, while conversely, smaller boutique operations may focus on structuring and advising much smaller deals valued at $50 million or less…. get the whitepaper.