Typical due diligence cost for self-funded searchers?

searcher profile

September 21, 2022

by a searcher from University of Pennsylvania - The Wharton School in Philadelphia, PA, USA

What are the typical due diligence cost a self-funded searcher should expect? For those who did self-funded searched I would appreciate your input on what your costs were. For those who targeted to keep their due diligence cost as low as is practically possible, what were some of the things you did to minimize the cost of DD?

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commentor profile
Reply by a searcher
from Babson College in Fort Collins, CO, USA
After polling around , most accountancies want something like 30-40k to do their bit. Lawyers want something similar or slightly more. Bigger deals ask for bigger $$ , international? More $$, technology or cyber issues to look into? More $$.. Their cost is all dependent on breadth of investigation. So the more you can tie up before LOI to limit their investigation, the cheaper the costs. I’d love to hear if this is the same experience other searchers are finding?
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Reply by a searcher
in Barcelona, Spain
I would say that unless you do it yourself, you start by asking for a red flags report, which will basically go and see whether there is any major thing to consider or not.

Once you are sure that there is nothing big, proceed to a full scope DD, trying to keep some of the costs as a success fee, which you could put as an acquisition cost, once you have decided to proceed.

During the full scope DD, I would recommend you divide between P&L and BS, so that the advisor only charges you what he or she is doing, so that you can stop the DD whenever you find out something major. I hope this helps.

PS: I have not conducted a deal in a SF, but worked as an advisor in Financial Advisory and these are the typical things that work to lower the budget. For any doubt do not hesitate on contacting me.
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