Why As-Built Documentation Matters in M&A
M&A transactions in food manufacturing move fast. PE firms have narrow windows to complete due diligence, issue bids, and negotiate terms. Every day delays the transaction and increases the risk of losing a deal to competing bidders.
One variable controls transaction speed more than any other: documentation clarity. As-built drawings and facility specifications are the foundation of operational due diligence. Without them, buyers conduct due diligence blind.
The Seller's Advantage
Sellers preparing for exit should establish as-builts 6-18 months before approaching the market. Why? It signals operational maturity and control.
When a seller presents a facility with current, accurate as-builts, they're saying: "We know our operation. We've invested in understanding our infrastructure. We maintain it systematically." This statement alone reduces buyer risk perception.
In contrast, a seller without as-builts sends the opposite signal: "We don't have clear visibility into our facility. You'll discover problems during due diligence." Buyers respond by increasing contingency allowances—typically 15-30% of anticipated CapEx.
Accurate as-builts also allow sellers to control the narrative. Buyers won't discover hidden conditions during facility tours; sellers can explain them proactively. This shifts due diligence from discovery mode to verification mode—substantially faster.
The Buyer's Perspective
Buyers use as-builts for two critical functions during due diligence:
First, they establish baseline operational understanding. Equipment locations, utility connections, process flows—all visible on one set of drawings. This accelerates facility assessment and allows buyers to identify synergies or cost reduction opportunities immediately.
Second, they enable accurate scope development for post-close capital projects. Buyers must estimate integration costs, facility upgrades, and operational improvements. Without as-builts, scopes are rough estimates. With them, scopes become detailed estimates—reducing the risk of post-close budget surprises.
The M&A benefit: fewer contingencies mean lower purchase price adjustments and faster deal close.
The Documentation Advantage
Facilities with current as-builts typically close 20-30% faster than those without. Why? Because buyers can conduct parallel, rather than sequential, due diligence activities. While operations assess production capabilities, technical teams assess capital requirements. While financial teams verify EBITDA, engineering teams quantify maintenance backlogs. None of this is possible without facility documentation.
Strategic Timing
Sellers should commission as-builts during the 18-month window before pursuing M&A. This allows:
- 12 months for documentation completion
- 6 months for seller to verify accuracy and address discrepancies
- Immediate presentation to buyers with confidence
For companies planning expansion or eventually considering strategic transaction, as-built documentation is foundational to both operational strategy and exit valuation. Accurate facility documentation enables faster buyer assessment, reduced contingencies, and more predictable transaction outcomes.
