Can someone dummy it down for me. What’s the relationship between FDD vs PE & IB.

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PE = Buyer or Seller of the house
IB = Real estate agent for the house
FDD = Help buyer or seller determine reasonable price for the house

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PE seller buyer of a house, IB is the selling agent/broker, FDD is the home inspector spitting that similar report.

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FDD is more to confirm that the price already determined is reasonable and supportable. Either the equity or debt funding the deal needs an objective third party to evaluate earnings to make sure it’s a sound investment, and FDD is much more insightful than an audit. IB facilitates the sale, more on the marketing side and have been engaged with the Seller through the entire process. Not all deals have IB (especially in middle market) but they do help in coaching the seller and managing their expectations throughout.

Most of my work is with PE simply because of deal volume and activity but I still have plenty of strategic clients (not PE) active in M&A that we help.

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Generally agree with this assessment, but I'd say that instead of determining the price is reasonable, more specifically, FDD gauges whether the inputs for the price / valuation model (EBITDA, NWC, Debt, etc.) are reasonable / supportable. I think it's an important distinction since usually the mechanics of the price are already negotiated in a LOI or, for bids, the buyer already has a model in place. As the FDD findings hone in on items of consideration for price inputs, it gives the buyer / seller reasonable arguments for price adjustments.

Does IB stand for investment banking?

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