Providers that do not charge or do flexible diligence charges?

May 19, 2021

by a professional from Northwestern University - Kellogg School of Management in Kansas City, MO, USA

What diligence providers have you worked with that do not charge for diligence? Or get creative/do a flexible diligence process on fees?

I am in the insurance space, and some charge a fee and some do not. Curious what other industries are structuring it the same way. And if so, has the experience been positive? There are times that there is a misalignment between management on expectations of providers and if they credit the fee up front what that means post-acquisition.

Reply by a searcher
from McMaster University in Toronto, ON, Canada

The answer is that for quality third party diligence (underwriting, QoE, appraisals) diligence, there are no firms I'm aware of that do not charge for diligence or work on a success fee. What they will do is tier the fee structure so that there is an initial cost for diligence and at every agreed upon stage leading up to closing, a report/service will need to be paid. The only time that we get "free" advice is from a service provider we already do business with and have an established relationship. They're willing to hop on the phone or send us industry materials because we're a "client" of the third party diligence provider.

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