Due Diligence Advice/Resources
July 02, 2024
by a searcher from Cornell University in Steamboat Springs, CO 80487, USA
$1.9M acquisition in the distribution space. Recently signed LOI. I am planning to work with a due diligence team. What are the key/must do due diligence items that should be done with the help of a CPA/due diligence team for a deal this size? Any good resources/books on navigating the due diligence process?
from Harvard University in Atlanta, GA, USA
1) My Searchfunder post on best DD Books: https://www.searchfunder.com/post/my-new-favorite-book-on-acquisitions-six-angles-on-the-same-deal-free-copy
2) I have over 250 Resources for Self-Funded Searchers here all searchable by deal stage, type of resource, etc.: Resources.Guardianduediligence.com (filter for QoE or Due Diligence)
3) My Fav Article on How to Manage Your DD Process: https://www.guardianduediligence.com/blog/how-to-manage-a-go-no-go-deal-process-post-loi
Feel free to email me or call me. My contact info is on the bottom of my website.
from INSEAD in Calgary, AB, Canada
If they say it will sell in 6-12 months, try to put a discount on it or if the amounts of old inventory is large, offer it on consignment.
The risk here is you may not know the dynamics of their specific inventory plus how quickly it can be replaced by a new version which then requires you to discount eventually.
I have 2 x distribution business in the $2m range and old inventory creeps up very quickly and is a pain to get rid of after it is too late. We do a winter & summer sale specifically to get rid of old or slow moving items.