The Private Equity Toolkit

10Deal Execution: Transaction Process and Due Diligence

Key Topics in Chapter 10:

• What to expect in a typical private equity transaction process
• Don't “boil the ocean”: ten principles of a well-managed due diligence effort
• Who does what and why you need it: an anatomy of the key due diligence workstreams

Deal execution processes are filled with thrills. Scarcely an hour goes by without a conference call, a meeting or an internal discussion focusing on a specific aspect of the transaction. I thrive when I find myself immersed in a deal execution process: I can feed on deal adrenaline alone and am content sleeping little, provided that the transaction is progressing, step by step, to the finish line. I relish the deeply analytical work on the investment target that gets compressed into a couple of critical weeks. And, of course, I enjoy observing some of the theatrical action that inevitably takes place when worn-out deal participants get completely caught up in deal fever. The most fascinating places are the conference rooms where the negotiations take place. While the initial discussions are often calm and civil, fast forward to the third meeting between the buyer and the seller, and you won't be too surprised to see some anxious people banging on the table and ruffled counterparties accusing each other of re-trading the deal terms. When sleep is but a distant memory and emotions run particularly high, you are likely to observe someone losing their last bit of patience ...