Due Diligence Checklists

Due diligence is the examination of a potential target for merger, acquisition, privatization, or similar corporate finance transaction. It is normally done by a buyer. Due diligence helps to establish how much a buyer will pay after examining the target’s assets, liabilities, processes, people, and growth potential. Investigative areas typically include:

  • corporate/business standing
  • financial and accounting information
  • physical assets
  • real estate and facilities
  • technology and intellectual property
  • human resources – employee and employee benefits
  • license and permits
  • environmental issues
  • taxes
  • customer, supplier, and other material contracts
  • products and services
  • legal proceedings and lawsuits
  • insurance coverage
  • consultants and advisors

Common Due Diligence Mistakes To Avoid

  1. Transaction Myopia: Focus is exclusively on doing the deal and fails to address essential post merger integration and operational issues
  2. Financial Myopia: Due diligence is too narrow and limited only to the core essentials: financial, legal and tax. Fails to include: operational, cultural, strategic, and organizational capability issues
  3. Checklist Myopia: Over-reliance on completing check lists and data collection rather than developing insight on where the value will be created or destroyed
  4. Lack of Senior Executive Involvement: Delegate the due diligence to junior resources with no ongoing role

 

Due Diligence Checklist Templates                     

 

Deal Documents
To effectively complete the M&A deal, Joint Venture, or Strategic Alliance, please click below to get the various documents required:

Term SheetDue Diligence Company ValuationDefinitive Agreement
Post Merger IntegrationGovernance & BoardApproach Targets

 

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