During which phase do potential buyers conduct thorough investigations in the sell-side process?

In the sell-side process of mergers and acquisitions, the due diligence phase is critical for potential buyers as it involves a detailed investigation of the target company. During this phase, buyers assess various aspects of the business, including financial statements, operational processes, legal matters, and any potential risks associated with the acquisition. The due diligence process helps buyers validate their initial assumptions about the company and ensure that they are making an informed decision before proceeding with a purchase.

Conducting due diligence allows buyers to uncover crucial information that can influence the transaction terms, such as price adjustments or the inclusion of specific contingencies in the agreement. This phase is essential for minimizing post-transaction surprises and ensuring that the buyer is fully aware of the target's strengths and weaknesses. The insights gained during due diligence play a significant role in shaping negotiation strategies and finalizing the deal.

The other phases, such as preparation, negotiation, and marketing, while important in their own right, do not encompass the comprehensive investigative nature of the due diligence phase, where the focus is on in-depth assessment and validation of the target company.