A common frustration sellers express during buyer diligence is, “They already asked this. Why are they asking again?” From the perspective of a seller who has never done this before, it can seem like the buyer’s due diligence team is highly disorganized. From the perspective of an experienced buyer, it’s the normal way due diligence is done.
Buyer’s due diligence team members do not ask the same question multiple times. However, different members often ask similar questions multiple times, as they each have a distinct focus and reason for inquiring. For example, a tax professional may ask about the structure of your ownership and your tax basis, while a contracts attorney may ask a very similar question but with the intent of understanding whether contracts will be transferred automatically at closing or might need to be novated on a case-by-case basis. There are hundreds of other examples of why buyer’s due diligence team members might ask apparently similar questions multiple times.
While you might think the process is “hopeless” regarding repeated questions, there is hope. Experienced M&A bankers can work with the buyer to help them consolidate their questions and facilitate multiple professionals utilizing a singular database for questions and responses. Over the past 25 years, Alderman & Company® has developed highly tailored tools, software, and processes to dramatically reduce redundancy during buyer due diligence. These tools save your management team precious time and enable the due diligence process to run more smoothly, leading to a faster closing.
Have a great day,
Max McFarland
Associate
