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Merger and Acquisition Due Diligence checklist
Financial Due Diligence
Review the last three to five years of audited financial statements and corresponding tax returns.
Analyze revenue streams, profitability trends, and cost structures.
Examine forecasts, budgets, and financial projections for reasonableness.
Legal Due Diligence
Inspect material contracts such as leases, loans, and employment agreements.
Verify compliance with relevant laws, including industry-specific regulations.
Assess ongoing or potential litigation risks and liabilities.
Operational Due Diligence
Evaluate the quality and condition of assets, inventory, and equipment.
Understand the target company's operational workflow and efficiencies.
Assess the IT systems in place, including cybersecurity measures.
Human Resources Due Diligence
Review employee structure, compensation, benefits, and labor relations.
Examine key management and staff qualifications, turnover rates, and succession plans.
Ensure compliance with employment laws and review any potential HR liabilities.
Market and Competitive Due Diligence
Analyze the target market size, growth prospects, and competitive landscape.
Evaluate the target company's market share, customer base, and supplier relationships.
Assess the brand strength, reputation, and intellectual property portfolio.
Cultural Due Diligence
Understand the target company's corporate culture and how it aligns with your own.
Identify potential cultural barriers to a successful integration.
Evaluate the compatibility of business practices and ethical standards.
