In the context of IPOs, due diligence
is a process adopted by issuers of securities to determine whether they have properly prepared their prospectus.
Investment Management Due Diligence
Association (IMDDA) is an organization singularly focused on both investment management and operational due diligence
Along with greater risk protection, an appropriate level of equity due diligence
can save investors money by providing information that they can use to negotiate the final purchase price.
Increasingly, enforcement authorities recognize the importance of conducting adequate due diligence
on third parties, regardless of industry.
It is also important that any due diligence
be planned, structured and focused on the key elements; otherwise the process can drift, wasting time, money and resources, and even worse a missed opportunity or a bad acquisition.
Simply defined as an investor's analysis of a potential investment opportunity, due diligence
is a concept that has found widespread acceptance.
Many sellers will conduct due diligence
on their own practices in advance of a sale, including reviewing contracts to determine if they are assignable, financial records to ensure there are no conditions that a buyer will find undesirable, the malpractice or employee claims history, and that all policies and procedures are in accordance with laws and standards of practice.
The opportunity for buyers is to use better-quality due diligence
information to identify and prioritize their "hot" issues and address them in the purchase agreement.
American companies active abroad typically have developed systems for due diligence
, but not all have consistently applied them to third parties retained for a tax and customs-related function, particularly if those third parties are professional services firms.
In addition, being a public company facilitates the initial purchasers' due diligence
, since the company will already be in the habit of accommodating the due diligence
needs of underwriters and the information requests of investors and securities analysts.
Another key area of due diligence
is to assess the insurance claims history of the facility.
He continues, "With more due diligence
, lenders can command a premium right now.