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M&A Factoid – What is Due Diligence?

 

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With regard to M&A, due diligence is an audit of a potential investment, which takes place prior to the closing of a transaction. Due diligence is not only an opportunity for buyers to thoroughly examine the financial statements, physical assets, intellectual property, etc. of a potential acquisition, but is also an opportunity for the seller to assess the potential buyer and their ability to fund the transaction at closing. Due diligence is a critical step in the M&A process, as buyers use it to ensure they understand what is being purchased and sellers use it to become better acquainted with the potential acquirer.

 

 

Topics: International, M&A