NEW YORK--(BUSINESS WIRE)--
Companies who undertake sell-side due diligence reviews before going to
market have a much better chance of impressing buyers, increasing their
sale price and reducing the potential for delays or incidents during
transactions according to a new report, Due Diligence Roadmap:
Excelling on the Sell Side. This report, conducted by Donnelley
Financial Solutions in conjunction with Mergermarket,
is based on a survey of 50 senior global executives, from corporates to
financial advisors.
Sell-side due diligence, which involves a seller reviewing their
business’ financial, organizational, and tax position, provides
potential buyers with more detailed information about the company and
its accounting and business practices, while at the same time providing
the seller with insight into any value-critical issues that may arise.
The final product is a high-quality report that lends credibility to the
sell-side process.
Conducting sell-side due diligence is also cited as a way to attract a
greater range of buyers and increase competition for the asset, which
enhances valuation. According to a Director of Strategy at a European
insurance company that made a US$1bn+ divestiture last year, “It is both
easier to approach different buyers and buyers show more interest when
this process has been carried out.”
While the process of sell-side due diligence is widespread, it turns out
that it is far from universal, with about 37% of those surveyed not
utilizing this procedure in every sales process. This may be due to the
size of the asset being sold relative to the cost. However, for those
who do choose to conduct sell-side diligence, the advantage is clear.
Key findings of this report include:
-
72% of companies indicated that their decision to conduct sell-side
diligence began as early as when the decision to sell was made or when
the Confidential Information Memorandum was being drafted.
-
Sell-side due diligence was conducted in roughly 63% of all sale
processes. Respondents believe the resulting high-quality sell-side
review decreases errors and notes potential risks that could affect
valuation and a deal’s path to completion.
-
Respondents cited the top benefits for sell-side diligence as the
improved accuracy of historical and projected financial information
(34%) and that risks and potential surprises are addressed early on in
the deal (28%).
The complete report is available for download here.
About Donnelley Financial Solutions, Inc.
Donnelley Financial Solutions (NYSE: DFIN) provides software and
services that enable clients to communicate with confidence in a complex
regulatory environment. With 3,500 employees in 61 locations across 18
countries, we provide thousands of clients globally with innovative
tools for content creation, management and distribution, as well as data
analytics and multi-lingual localization services. Leveraging advanced
technology, deep-domain expertise and 24/7 support, we deliver
cost-effective solutions to meet the evolving needs of our clients. For
more information about Donnelley Financial Solutions, visit dfsco.com.
Use of Forward-Looking Statements
This news release may contain "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and the U.S. Private Securities Litigation Reform Act of 1995.
Readers are cautioned not to place undue reliance on these
forward-looking statements and any such forward-looking statements are
qualified in their entirety by reference to the following cautionary
statements. All forward-looking statements speak only as of the date of
this news release and are based on current expectations and involve a
number of assumptions, risks and uncertainties that could cause the
actual results to differ materially from such forward-looking
statements. Readers are strongly encouraged to read the full cautionary
statements contained in Donnelley Financial Solutions’ filings with the
SEC. Donnelley Financial Solutions disclaims any obligation to update or
revise any forward-looking statements.
About Mergermarket
Mergermarket is a business development and market intelligence tool
designed specifically for the M&A sector and provides proprietary
intelligence and analysis on corporate strategy across the world. With
around 200 M&A journalists talking directly to senior executives,
dealmakers and other key players in over 60 locations globally,
Mergermarket reports on the whole deal life cycle, from mapping out
companies’ early stage strategic intentions to tracking deals before
they develop and providing real-time news on live events, thereby
creating a large window of opportunity. Subscribers can also mine for
trends, patterns and deal ideas using Mergermarket’s comprehensive deals
database and regular data-driven editorial analysis and commentary.
Visit www.mergermarket.com
to learn more.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170111005262/en/
Donnelley Financial Solutions
Investor Contact:
Dave
Gardella
Chief Financial Officer
312.326.8155
david.a.gardella@dfsco.com
or
Mergermarket
Chrissy
Carney
Public Relations Director
Tel: (646) 378-3118
Chrissy.carney@mergermarket.com
Source: Donnelley Financial Solutions