The Due Diligence Process, from a Client's Perspective

Whenever a Due Diligence process begins there are countless instances when one party is not taken into account by project’s promoter, namely the “target” and/or “seller”.  More often than not Capital Corp Merchant Banking has come across a seller that was fully informed to the extent of the Due Diligence process to be undertaken on their asset and is hesitant about providing information.

 

A Due Diligence is demanding enough alone, even when not taking into account a hostile environment of an upset “target”.  Full and timely advanced notification of the Due Diligence to the seller has in the experience of Capital Corp Merchant Banking paved the way for smooth cooperation.

 

For example, a target has the right to be concerned that certain trade secrets or private business practices will be exposed, or worst of all, wrongly profited from by the firm completing the Due Diligence.  This is not and has never been the case with Capital Corp Merchant Banking.

 

In fact, the project promoter taking the time to explain the scope of the Due Diligence to the target may elicit certain confessions or defects not previously clarified because the target now recognizes the seriousness of the process that is to be undertaken.

 

In summary, a target that is well versed in business transactions will generally not be surprised by the scope or timeline of a professional Due Diligence process.  Of course, a less weathered one may have a vague understanding of this study and thereby may underestimate its true depth.  Therefore, a project promoter should assume its client has less sophistication and explain the program of a Due Diligence in detail.

 

Respectfully,

 

Capital Corp Merchant Banking