Time Scope of Commercial Due Diligence

Published:2014-05-15    Source:HICG

Reasonable time span of commercial due diligence is from three weeks to 3 months.

Firstly, staffs engaged in the commercial due diligence (CDD) will be exhausted if the whole time span exceeds three months. It is a risk for appropriate analysis and then the M&A decisions once the information preparation and delivery are delayed when the diligence-engaged staffs of subject feel tired out. According to Huaran’s experience, such a vicious spiral usually occurs at the beginning of the third month after the CDD starts. Secondly, investigators tend to have myopic view on analysis, which leads the project being stuck in a hard situation. Therefore, the time scope of CDD should be controlled in three months.