Private Equity Due Diligence

A private equity investment will not be complete without a thorough due diligence procedure. This is the most important step to identifying areas of value-generating operations improvements prior to investing into a business.

This process usually begins with a confidential memorandum (CIM) A document which includes financial data and a description of the management team, and commercial details, such as details about the company’s customers and products. Then, a smart private equity firm will supplement the CIM with questions that are more specific to the business and utilize an electronic data room to collect documents and answers from the target company’s management team.

Legal due diligence is a crucial step, especially when it concerns buyouts. The typical business plan for a purchase involves cutting staff, selling off assets or closing offices or facilities – and all of these actions result in generating legal issues.

In a time of high multiples of purchase, it is more crucial than ever before to conduct a thorough commercial and marketing due-diligence. A thorough approach to due diligence can assist private equity firms develop a well-thought-out day one growth strategy and unlock value faster than they ever thought possible.

Contact our team to learn more about Baker Tilly’s due diligence services can help you. We’re here for you to help succeed in your next deal. The featured image is credited to Getty Images.

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