M&A Due Diligence Checklist
Whether you're acquiring or being acquired, thorough due diligence is crucial. This checklist ensures you know the right diligence topics to collect or send for a smooth process.
Why Due Diligence Matters
During due diligence, the seller discloses key information about their operations, finances, and structure. The buyer verifies this information to ensure everything is accurate and above board. Missing or disorganized documents can slow down the process, erode trust, and jeopardize the deal.
Key Categories for M&A Due Diligence
Corporate Documents/Legal Information: These documents establish the company's legal foundation, ownership structure, and key players. Gather documents like Articles of Incorporation, shareholder agreements, stock certificates, and meeting minutes.
Financial Records: Financial reports provide a snapshot of the company's financial health. Gather bank statements, credit card statements, loan agreements, and trial balances for the past three years.
Tax Information: Tax records paint a detailed picture of the company's tax history. Gather state and federal tax returns, property tax statements, and documentation for any tax credits or agreements.
Sales & Marketing: Sales data is essential for understanding the company's market position and performance. Gather revenue by customer, product line, and geography, sales pipeline information, and churn analysis.
Human Resources: HR documents shed light on the company's workforce and culture. Gather employee and contractor agreements, recruiting and hiring policies, employee benefit plans, and a list of all employees with their roles and schedules.
Intellectual Property: Intellectual property (IP) can be a major factor in a company's valuation. Gather documentation for trademarks, patents, and any licensing agreements related to IP.
Technology & Operations: Technology plays a critical role in modern businesses. Gather a list of IT resources, personnel, contracts, and policies, along with details of current and upcoming IT projects.
For more information on the specific documents we recommend collecting or sending in each of these topics schedule a consultation today.