In Deal Notes® 169, we discussed the differences between buyer due diligence and preparation due diligence. In this Deal Note®, we are continuing that theme but focusing on how replicating buyer due diligence in the preparation stage will set you up for success when selling your middle market aerospace and defense company.
During due diligence, the buyer (and their team of professionals) will submit hundreds of information requests. If your key employees have never been through an M&A process before, you will find buyer due diligence to be extremely challenging for your people.
Your key employees, who will be responsible for providing due diligence information to the buyer, need to be trained on what kinds of information requests to expect, how to gather the information quickly, and how to obtain the necessary checks and approvals before releasing.
How do you prepare for them? You do so by practicing. When your banker is drafting the Confidential Information Memorandum, use that process as practice for buyer due diligence that will come later on. Require that your employees, especially those who have never been involved in M&A, move with speed and exacting accuracy.
By practicing with your bankers, when the stakes are low, you can train your key employees so they will be more successful when the stakes are high.
As we say so often in our Deal Notes®, thoughtful preparation is vital. Preparing your employees for buyer due diligence is no exception.
Have a great day everyone,
Ryan Kirby
Junior Partner
