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Confirmatory Due Diligence

Definition - What does Confirmatory Due Diligence mean?

Confirmatory due diligence is the process conducted by the buyer within the last 60 days of the transaction cycle during which legal, financial and operational due diligence is performed.

Divestopedia explains Confirmatory Due Diligence

Confirmatory due diligence is performed after the term sheet is issued in order to validate assumptions made by the seller. For a smoother deal transaction, the seller must anticipate buyer requests and prepare to address any issues. Financial due diligence is performed to review financial performance and verify accounting processes. Legal due diligence reviews the seller's contracts with suppliers and customers. Operational due diligence reviews the seller's back office systems, technologies and assets. Meetings with key customers may also be conducted in this phase.

After any issues uncovered through the due diligence process have been resolved by the seller, the final binding purchase agreement for the deal transaction is executed.

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