Mid-market funds spend 6-10 weeks on CDD on platform deals, the current “middle ground” yielding some deals closing with moderate investments (capital and time) on both ends.
Due diligence is inevitably a compromise. Operating partners stepping in may need 6 to 18 months to fully internalize a business. Shortcuts are taken for obvious reasons, and what gets covered is a best case estimate.
Between QoE reports, banks, lenders, investors, LPs, consultants, and due diligence experts vetting different portions of the deal, and the M&A advisors, costs are capped, or scope is limited to make the model sustainable in the first place.
The full dive with 360 commentary for both sides on the table in the weekly issue below.
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Commercial Due Diligence Is Where the Mid-Market Valuation Gap Opens
Mario Peshev
