Simply put – an additional opportunity to investigate a potential acquisition/venture.
The M&A process should begin with a strategy that defines business objectives that may include M&A – Joint Venture (JV), Merger, Acquisition. If M&A is a part of the strategy, there should be:
A good example of the soft measures would include Procter & Gamble’s Vision for Environmental Sustainability, “…100% renewable energy powering our plants, zero consumer or manufacturing waste going to landfills, and products made from 100% renewable or recycled materials.”
Due Diligence is an opportunity for qualified personnel to investigate the fit with a company’s strategy – hard and soft goals. Qualified personnel are technically competent to assess the soft and hard goals, and they thoroughly understand the acquiring Company’s goals. If they don’t understand the Company’s strategy and goals, how will they assess proper fit with the strategy?
One of the first steps will be to understand the investment goals. A well-managed Business Development process will summarize the acquisition goals for a specific investment in a 1-2 page summary that includes:
Until the on-site or data room Due Diligence begins, the investment criteria are mere estimates, and understanding the target company is speculation… expected transition plans are built on assumptions.
As you begin the Due Diligence, prioritize your activities to accomplish the most within defined time and information constraints.
CFO Insight LLC