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Due Diligence Checklist

Comprehensive checklist for M&A transactions and company acquisitions

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This checklist is for informational purposes only and does not replace professional advice. For a legally and economically sound Due Diligence, you should engage specialized advisors (auditors, M&A lawyers).

100+
Checkpoints
6
DD Categories
M&A
Standard
Progress:

When Do You Need a Due Diligence?

Company Acquisition (M&A)

Before purchasing a company for risk assessment and purchase price validation.

Investment Rounds

Before VC or PE investments for valuation and contract drafting.

Mergers

Before the merger of two companies to evaluate synergies.

Vendor DD (Seller Side)

Preparation for a sales process for better negotiating position.

Typical DD Process

1

Preparation & Scoping

Define DD scope, assemble team, sign NDA, set up data room.

1-2 weeks
2

Document Review

Analysis of all provided documents, creation of Q&A lists.

2-4 weeks
3

Management Interviews

Discussions with management and departments to clarify open points.

1-2 weeks
4

Reporting & Red Flags

Preparation of DD report with findings, red flag list and recommendations.

1-2 weeks

Frequently Asked Questions about Due Diligence

What is Due Diligence?
Due Diligence (DD) is a careful examination of a company before a transaction such as purchase, merger or investment. The term comes from US capital market law and means "due care". A Due Diligence typically includes Legal, Financial, Commercial, Tax and HR reviews.
How long does a Due Diligence take?
The duration depends on company size and complexity. Small companies (up to 5M revenue): 2-4 weeks, Mid-market (5-50M): 4-8 weeks, Large companies (over 50M): 8-16 weeks. A Vendor Due Diligence should start 2-3 months before the sales process.
What does a Due Diligence cost?
Costs vary widely: Simple DD for small companies from €10,000, comprehensive DD for mid-market €30,000-100,000, complex international DD from €100,000. Typical daily rates: Auditors €1,500-3,000, M&A lawyers €2,000-4,000.
What is the difference between Buyer and Vendor DD?
A Buyer Due Diligence is conducted by the buyer to identify risks. A Vendor Due Diligence is prepared by the seller before the process to create transparency and have a better negotiating position.
What are typical Deal Breakers?
Common Deal Breakers: Misstatements in financial figures, unknown litigation, compliance violations, missing change-of-control approvals, tax risks, environmental liabilities, or loss of key personnel.
What belongs in a Data Room?
A virtual Data Room contains: Corporate documents, financial records, contracts, tax assessments, permits, IP documentation, insurance policies and organization charts. The structure typically follows the DD categories.
Who conducts the Due Diligence?
Specialized advisors: Auditors (Financial/Tax DD), M&A lawyers (Legal DD), Management consultants (Commercial DD), IT experts (IT DD). For larger transactions, a DD team is coordinated under project leadership.

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