A sell-side due diligence prepared by a potential seller can be a worthy investment, and is a growing trend, according an article written by Steven E. Brady of Grant Thornton, in the February 2011 edition of Mergers & Acquisitions magazine, a publication of ACG.
A seller can actually increase the speed to closing a deal and have more certainty to a valuation with a sell-side due diligence process involving a third party experienced with financial, tax and operational expertise. By conducting this analysis before going to market, issues can be identified well in advance so corrective actions can be taken. If issues are discovered from the buyer, re-negotiations will most likely lead to a lower valuation or even killing the deal.
Of course, this process will add another layer of cost for the seller, but the potential benefits could far outweigh this extra expense. Knowledge about your business and careful planning is absolutely crucial in executing an exit strategy.
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