Page 26 - SONEPAR 2021 - AcquisitionBook

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PHASE 4: DUE DILIGENCE
Prepare the DUE DILIGENCE
The DUE DILIGENCE phase allows the purchaser to investigate additional internal data made available by the target to be able to determine a more precise valuation and risk profile of the target.
As specified in the COMPLIANCE POLICIES AND PROCEDURES MANUAL and based on SONEPAR’s corruption and influence peddling risk-mapping, compliance (including, without limitation, anticorruption) DUE DILIGENCE with respect to M&A targets is critical and must be systematic. Compliance DUE DILIGENCE can reveal elements that might affect the setting of the transaction price or even lead SONEPAR to drop the opportunity.
4.1 PREPARE THE DUE DILIGENCE
To achieve maximum efficiency in a sometimes very limited time frame, the preparation of the DUE DILIGENCE is key for the acquisition process.
It is thus crucial to:
➜ identify what has to be investigated based on the risk assessment previously performed (see section 2.3.9);
➜ negotiate with the other side what information will be needed; ➜ set up the team:
• the DUE DILIGENCE team (internal and external) must be identified when presenting the deal to the INVESTMENT COMMITTEE in order to ensure adequacy and availability,
• relevant operational associates shall be integrated in the DUE DILIGENCE team (commercial, vendor relation, supply chain, digital or IT team, etc.),
• for large and strategic acquisitions, priority must be given to external resources to handle the volume and complexity of the information that will be disclosed in the DATA ROOM, ensure independent and expert review and facilitate relationships with the seller and its advisors.
Do not underestimate the impact of DUE DILIGENCE on the workload of internal resources.
24 SONEPAR - ACQUISITION MANUAL - 2021 - FOR INTERNAL USE ONLY
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