What is a Due Diligence Checklist?
A due diligence checklist is a way to analyze a company that you are acquiring through a sale or merger.
In the context of an M&A transaction, “due diligence” describes a thorough and methodicalinvestigation and assessment. It scrutinizes every facet of a target company's key operations, finances, legal standing and more.The process of due diligence ensures that potential acquirers gain an accurate and complete understanding of a company. It helps evaluate a company's strengths, weaknesses, risks, and opportunities.
The creation of a due diligence checklist provides the detailed roadmap required to guide such an extensive analysis. Businesses preparing to expand their footprint through anM&A transaction should not view the due diligence checklist as a simple formality. Instead, it is a strategic imperative that can mean the difference between a successful undertaking and a costly setback. A setback can have far-reaching negative consequences for both the acquirer and its target.
So what should a comprehensive due diligence checklist cover? Let’s take a closer look at the necessary steps for conducting due diligence.
