Does onsite visit really helps in Due Diligence?
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It can hold exceptional importance in certain situations, especially in the case where a targets products are produced by an external manufacturing partner.
The established contracts and IP ownership may be readily available in the data room but the actual conditions of a facility, and their true processes, can be critical. The cost and time to take a flight could not only help uncover optimization opportunities that could be implemented post deal but avoid a surprise in quality, cost, or reputational risk. Even in the case where internationally recognized auditor data may be available a visit by the buyer, who knows the product / industry process exhaustively, can see things others following a checklist may miss.
Yes, 100 percent this can help due diligence. It allows for the face-to-face interactions rather than just in the VRD. It will also allow you to see the day-to-day operations and as others have said see if the culture fits what you are seeing. You can also obverse if items do not match what is said, large amounts of inventory sitting on shelves, no inventory etc…
Yes, it is important. It serves as an opportunity to understand the business, the seller better and build a more physical relationship which will be helpful in future correspondence.
Beyond the items mentioned, I believe that one of the key purposes of the onsite visit is to mitigate post-closing issues. In the industrial sector, the sooner the condition and state of the acquired assets are understood, easier these matters can be addressed in a sales and purchase agreement.
Hi Xin Yi Ho, yes I believe onsites can be imperative in a potential deal. In the case of my company, an onsite allowed us to determine if the company we looked to continue dealings with were as reputable and organized as they initially presented themselves to be through virtual communications. It encouraged us to exercise additional caution as we proceeded with the deal, and we ultimately found that several key figures and values they provided us were inaccurate. I would definitely recommend an on site in the due diligence process.
I really think that onsite visit is very helpful in due diligence as well as interviews with all the functional managers of the target. The acquirer should definitely pay at least a visit in the target firm in order to experience the culture and the processes of the target as much as he/she can.
I believe it is important as often the presentation of a location and interactions with the management, can reveal a lot of things that are relevant to your due diligence phase. It is true, the saying that how an individual or organisation does one thing, is the way that they do other things. During a site visit, if there appears to be many issues that are clear for you to see, it is likely just the tip of the iceberg with many more issues that are hiding under the surface which you cannot see.
I believe that on site visits are essential to understand the business, review asset condition, have an impression about the operational standards and identify potential gaps, as well as validate some of the assumptions made in the other streams of the DD, thereby reducing the risk in the transaction.
I think and on-site visit is a must. I need to get my eyes on a place and meet with employees, vendors, and customers to get a true feel for the company values and culture. I conduct walk-throughs after the financial DD and online research have occurred. Once I logically believe a deal is a smart investment, then I need to get on-site and feel it.
Onsite visits can be very valuable during due diligence. While documents and reports provide important information, visiting the company in-person often gives a clearer understanding of the organization’s operations, culture and working environment. It also allows the acquiring team to interact directly with management and employees, which can reveal insights that may not appear in financial statements or presentations. So yes, I do believe onsite visits can help identify potential risks and opportunities more effectively.
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