Private Markets Due Diligence Places Outsized Demands on Dealmakers
Extensive study by SS&C Intralinks,
WINDSOR, Conn.,
"Dealmakers continue to pursue multiple opportunities in private markets, but the environment for fundraising and deploying capital is challenging," said
Key findings from the report include:
- The average due diligence period, from VDR opening to the public announcement of a deal, takes 234 days for a private target versus 125 days for a public one. In the last decade, the pre-announcement due diligence period has stretched to 203 days from 124 days in 2014.
- On average, private targets upload 7,583 files to a VDR versus 4,896 documents for a public deal. For medium-sized deals – most prevalent in the market today – the number of files uploaded goes up to over 8,000.
- More people are involved in due diligence for private deals, with an average number of 271 VDR users collaborating versus 195 users for a public target.
The research also found medium-length due diligence tends to produce the best outcomes:
- Deals with medium-length due diligence periods of around 139 days are more likely to be completed. Such deals are likely to take 104 days from start to finish.
- Buyers are less likely to pay a premium on medium-length due diligence deals, with the price moving about 22% during such reviews. The average price appreciation following short and long due diligence periods is 30% and 33%, respectively.
- Deals with medium-length due diligence periods produce the best total shareholder returns of up to 4%, while short or lengthy due diligence periods often result in adverse outcomes.
Learn more about how deal terms impact due diligence here and read more about due diligence dynamics here.
SS&C Intralinks is a pioneer of the virtual data room, delivering software-enabled services across the entire deal lifecycle, including deal marketing, deal prep, due diligence, insights and post-merger integration. Intralinks technology enables and secures the flow of information by facilitating M&A, capital raising and investor reporting. SS&C Intralinks has executed more than
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