Within an M&A process, the due diligence plays a central role. Here the potential buyer is given the opportunity to conduct a comprehensive analysis of the legal, financial, tax and other situation of the target company. The aim of due diligence is to identify the risks and opportunities as well as the key value drivers of the business. Different areas of due diligence are employed at different stages of an M&A process. For example, due diligence can be carried out by the buyer during the verification phase, alternatively it can also be initiated by the seller in before the transaction begins (so-called vendor due diligence) or finally carried out for confirmation (so-called confirmative due diligence).
Due diligence is carried out with the help of a data room, which makes all relevant information available to the potential company buyer. Nowadays, the data room is set up and controlled electronically. In the data room, the company data and transactions are compiled comprehensively and prepared in a structured manner according to its respective areas:
- IP / patent protection
- Purchasing / suppliers
- Customer structure
- Products / services
- Market / competition
- Social / governmental
While company documents are reviewed, personal management presentations are usually employed in parallel, which are combined with a company site visit. Unanswered due diligence questions are answered during Q&A telephone/video conferences and via the data room.