Diligence is required to provide the buyer with a validation of
purchase price and a clear indication of deal risks – a
balancing act between cost and perceived risk. Diligence should be
tailored to the deal and vary depending on what is being purchased
and the complexity of the transaction. Buyers conduct financial and
legal due diligence, evaluate the financial potential of the merger
or acquisition and proceed with closing and integration. But for
some buyers, love is blind and little attention is paid to proper
due diligence. Here are a few common mistakes that may lead to
increased closing and post-closing costs.
Mistake #1 – Focusing only on financial due
diligence
Due diligence does not stop at the financial side. The buyer may
become too focused with financials to the detriment of other areas.
A systematic assessment of all aspects of the business is required
to ensure value for money. Areas of focus include legal, tax,
management, intellectual property,
