The Merger Verger is not a big fan of “short and sweet” due diligence checklists but this one from Loren G. Carlson, of the CEO Roundtable, is well worth reviewing, particularly for those new to the topic.
There are two reasons why I like this list:
- It reinforces the essential (and dual) role of due diligence, reminding us that while information is important in the process of buying a company it is absolutely essential in making that purchase succeed; and
- It lays out the sometimes non-obvious connection between legal due diligence and operations, citing examples of how “purely legal” stuff can affect directly the commercial elements of a deal and therefore its success or failure.
Carlson acknowledges that his article is to “get you started” but with that caveat in mind he does a nice job. He also notes that the most successful acquirers were those that “invested in post-mortems after the deal” to learn from what went well and what didn’t. (Too important topic to cover here/now; more another time.)