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5 Steps for Due Diligence M&A in Romania
- First step in the due diligence process is to assemble a team that is responsible for the entire investigation. A due diligence team is usually composed of: investors, accountants, lawyers, personal consultants, and other specialists or services’ providers, if needed.
- Next step of the process: gathering the important documents. The team makes a list with the necessary documents that must be verified and adds the corresponding time frames in which these documents must be delivered. After signing a non-disclosure agreement, the due diligence team may demand this information from the target company.
- In some cases, the buyer and the target company may organize a series of meetings in order to discuss the M&A process and the requirements concerning the necessary documents. During these meetings, both parties are able to determine whether or not they are compatible and if the buyer is satisfied with his investment.
- The next step would be analyzing all the information and documents that were gathered. If the buyer has concerns regarding certain documents, this is the right time for the target company to address them.
- During due diligence, the team establishes whether the identified issues could lead to cancelling the whole transaction or whether the purchase offer should be adjusted. In some cases, the information gathered could modify the merger’s structure or its timeline.
- In many cases, the buyer will view the purchase as a solid investment and, as a result, the M&A process continues as planned.
- The buyer will demand the whole purchase to be adjusted according to his findings during the due diligence.
- If the issues that were identified are too challenging to overcome, the buyer should cancel the whole purchase.
Simona Reithofer, Partner, Oglinda & Partners