Company Operations Information Needed for M&A Due Diligence

By Bill Snow

The Seller in an M&A deal needs to provide information about every aspect of the company so the Buyer can do her due diligence prior to closing. These are the types of information that Seller will need to provide about company operations:

  • Listing of all existing products or services and products or services under development.

  • Listing of major operations discontinued during the reporting period, or expected to be discontinued.

  • Copies of all correspondence and reports related to any regulatory approvals or disapprovals of any of the company’s products or services.

  • Summary of all complaints or warranty claims.

  • Summary of results of all tests, evaluations, studies, surveys, and other data regarding existing products or services and products or services under development.

  • Samples of all sales and promotional material utilized in marketing products and services (catalogs, brochures, sample kits, and so on).

  • Copies of all articles and press releases relating to the company published during the reporting period.

  • Schedule of any volume or sample rebate programs or special deals with customers (discounts, terms, and so on).

  • Copies of any contracts or agreements with customers, whether formal or informal, including pricing arrangements, incentive programs, inventory/supply arrangements, quality criteria, warranties, and so on.

  • Copies of the company’s quality and any similar manuals.

  • Schedule and copies of any customer quality awards, plant qualification/certification distinctions, quality certifications, or other awards or certificates that are reflective of superior performance.

  • Copies of internal and external quality audits performed during the reporting period.

  • Detailed listing of all business application software, vendor and version, number of licenses, and approximate acquisition date.

The Buyer will expect to have access to due diligence materials almost immediately after a letter of intent (LOI) has been signed.