Series 79: Assisting In Performing Due Diligence On Potential Buyers

Taken from our Series 79 Top-off Online Guide

Assisting in Performing Due Diligence on Potential Buyers

While the focus of due diligence in an acquisition is on the seller’s business, the seller should also perform due diligence on potential buyers. The investment banker typically assists the seller with this task.

One area of inquiry is whether a potential buyer is serious about the acquisition. The seller should investigate the potential buyer’s previous acquisitions (if any), as well as its general reputation. Over time, some would-be buyers garner reputations as never being quite willing to pull the trigger on a deal. The seller might waste significant time and resources on what experience suggests is a likely dead end. Alternatively, some buyers have a reputation for demanding concessions at the last minute, when it would be awk

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