RSS SyndicationWhen considering getting involved in a merger and acquisition transaction, the buyer will want to do a substantial amount of due diligence before committing. This is even more important when dealing with private company acquisitions where the company hasn’t been scrutinized by the public markets.
Some of the important areas to review include:
- Financial Matters
The company’s financial records and metrics should be examined, along with projections of future performance.
- Technology and Intellectual Property
The buyer needs to be aware of the technology or intellectual property of the company and how it is protected.
- Customers and Sales
It’s important for the buyer to know the company’s customer base and sales pipeline. This includes how satisfied the customers are with the company and revenue generated from the top customers.
- Strategic Fit
How the company will fit within the larger buyer organization should be taken into consideration. A review of the services, products and technologies the company provides compared to a list of existing services, products and technologies should be completed. Then a determination as to how these items will complement or enhance the company offerings can be completed. Will there be an increase in revenue, a cost savings or improved performance due to the merger or acquisition?
- Material Contracts
Take the time to look over all material contracts and commitments the company might have in place. Contracts may include loans, supplier contracts, employment agreements, and more.
- Litigation
Look for any litigation whether it be pending, threatened, or settled, arbitration, or regulatory proceedings involving the company.
- Insurance
Review the company’s key insurance policies like employee liability, health, intellectual property, and more.
- Environmental Issues
Depending on the nature of the business the company conducts, an environmental review may need to be conducted to analyze any potential environmental issues.
Due diligence is easier with an attorney who knows their way around company proceedings. InnovaCounsel attorneys can assist companies during merger and acquisition transactions to make sure they have as much knowledge as possible about the company in question.