Short-term Commercial Due Diligence

Published:2014-05-28    Source:HICG

What is Short-term Commercial Due Diligence?

Short-term Commercial Due Diligence, as the name indicated, is a Commercial Due Diligence conducted within a very short duration. By conducting this kind of research, our client is able to obtain the key internal information of a target company.

Short-term Commercial Due Diligence is needed under the following circumstances

1.If the paces of the transaction procedures are delayed while the date of signing the final agreements cannot be differed for certain reasons, there will be very limited time left for conducting Commercial Due Diligence.

2.The business of the target company is very unique, which leads to the limited usage of the data room in the target company. If the data room remains longer, there will be very high possibility of some leakage of the confidential information. Therefore, the target company may request for a Short-term Commercial Due Diligence to eliminate the possibility.

3.Those target companies, whose performances fluctuate substantially with the seasons, prefer to be researched in a very short time in an average season.

 In the above situations, Commercial Due Diligence shall be conducted within a very short time.

 Material Matters in the Short-term Commercial Due Diligence

From the perspective of the process, Short-term Commercial Due Diligence is identical to the common Commercial Due Diligence. However, there are some unique material matters in the Short-term Commercial Due Diligence compared to the common ones as follows:

1. Determining the scope prudently

2. Assuring sufficient manpower

3. Maximizing the frequencies of interviews within limited time

4. Preparing the checklist in advance

5. Seeking for chances of following-up