Virtual General Counsel LLC
Virtual General Counsel LLC

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How can a business practice due diligence when being acquired?

| Mar 12, 2019 | Mergers & Acquisitions |

Whether a business is a few years, or a few decades old, it might be time for it to transition into a new phase by being acquired. Acquisitions are a period of change, but it can often mean bigger and better things for the company itself. So how can a company get itself ready for this transition?

One aspect of an acquisition process that an acquired business will want to attend to is due diligence. The acquirer will check off items on a list, formally, or informally in order to determine if the acquired property meets the valuation or to compare it to the existing structures, and business activities of the larger company. There are several topics of which smaller items of interest can be explored when doing due diligence in a merger or acquisition. Organization, financial information, physical assets, real estate, intellectual property, employees, licenses, environmental issues, taxes, and so goes the list, are all aspects that are important and need to be assessed through due diligence.

There are many smaller topics within the larger topics listed, that will be a part of due diligence. If the company being acquired can provide this list of topics necessary and relevant to the acquisition, it can save time and can make the transition smoother for everyone. Providing accurate information is pertinent, as any miscalculation or misrepresentation of the company’s current situation can cause unnecessary delays in the mergers & acquisition process.

There isn’t really any stone that will go unturned when it comes to company acquisitions. Prepping for the transition can save a lot of time later on, when questions are raised about all aspects pertaining to the business. This includes internal and external factors.