The Value Of Pre-Close Operational Diligence In Mitigating Risks and Uncovering Hidden Value

Just like a quality of earnings (QofE), the use of operational diligence is growing in relevance and utilization. Identifying undisclosed risks pre-close is not about avoiding deals, rather it allows better clarity for the prospective private equity sponsor to negotiate well pre-close, and approach the deal with a more complete plan to address those issues post close. Identifying risks early in the diligence process is central to addressing those same issues before they achieve critical mass two or three years after closing.