Sort due diligence early for a smooth sale

Those who are old enough may remember the first scenes of the 1960s allegorical drama The Prisoner following Number Six’s arrival in The Village when he is quizzed by Number Two and is told that, “We want information, information, information!”

By Steve Jarman, partner in the corporate deals team, Taylors Solicitors

The amount of information required for a due diligence exercise can be daunting and seem like a complete drag. But it’s not, and, the earliest that a potential seller realises that, it can make a great deal of difference as the process develops.

If only clients approached us earlier in the process to review such things as their contracts, their employment documentation and their intellectual property matters this would allow any potential problems to be picked up at an early stage on an internal basis and remedied before that information was passed to a potential purchaser for them to evaluate. Documentation disclosed as part of the due diligence exercise which is in ‘apple-pie’ order is more likely to receive a favourable reception and offer from a buyer than information which reveals problems that is going to cost a buyer to remedy post any deal.