Due Diligence Process Timeline

February 15, 2024
by a searcher in United Kingdom
Hi all,
Would like to ask what a typical due diligence timeframe would look like in terms of time scales for a company with revenue of 10m & 50 employees. is this done all at one time or is it split into segments over a few months?
from University of Canberra in Perth WA 6000, Australia
The typical process here in Australia is tending to take 2-4 months. One of the biggest factors is the sophistication of the seller. Many havent heard of a 'data room' let alone know what should be in one! But that is the trade off because it is that very lack of sophistication that attracts a searcher to the buisness as it provides for 'quick wins' once acquired. So the fact that it may take 6+ weeks to get all the financial details together (and sometimes longer to get the legal and other technical DD data you may need), will lenghten the process.
Whilst this can be frustrating, the prudent searcher will consider it as a 'fact find' into what they can do once behind the desk. The other thing to do here is use that time to build the relatiohships deeper with the owner. We find you will need that during this period - especially if there are tough conversations about variances, valuation expectation shifts etc.
Another aspect is how you have briefed your DD service providers. Really important to provide a tight fitting brief so that you dont find yourself with a huge bill at the end for more work than is potentially required to make a decision.
Project manage the process with a simple gantt chart and share these expectations with your providers and the seller to ensure expectations are aligned and that you can effectively manage the time or scope creep that may happen.
in Washington, D.C., DC, USA