Introduction:

This workflow is designed to walk you through every stage of the due diligence process to ensure the final report is both thorough and comprehensive.

INFO: For step-by-step guidance on creating, editing, managing, and running workflows, read Getting Started with Process Street: The 5 Stages of Process Building.

INFO: Tasks in this workflow have been assigned using Dynamic Role Assignments. Read more about Role Assignments in our Knowledge Base or watch the video below.

Ensure both parties sign nondisclosure agreements

Record the details of when and who has signed the NDAs for each company. 

This task utilizes Forms Automation features such as Dropdown Menu, Date Selection, and File Upload. Read Getting Started: How to Use Form Fields for detailed instructions, or watch the video below. 

Confirm the information exchange has occurred

Conduct document review:

Each task in this section can be completed as the relevant department compiles their information. 

INFO: The following tasks use the Subtask feature. Subtasks are small lists of items that can be checked off in your workflow runs. Read more about Subtasks in our Knowledge Base.

Document all corporate structure & general matters

Confirm that each of the following documents has been reviewed as part of the due diligence process.

  • 1
    Incorporation documents
  • 2
    Corporate bylaws
  • 3
    Organizational chart
  • 4
    Lists of all securities holders
  • 5
    Stock option agreements and plans
  • 6
    Stockholder and voting agreements
  • 7
    Warranties
  • 8
    Stock appreciation rights plans and related grants
  • 9
    Recapitalization or restructuring documents
  • 10
    Minutes from all board meetings since charter
  • 11
    Minutes from all shareholder meetings since charter
  • 12
    Minutes from all executive committee meetings since charter
  • 13
    Agreements related to any sales or purchases of business

Assemble all financial & tax reports

Confirm that each of the following documents has been reviewed as part of the due diligence process.

  • 1
    All federal, state, local, foreign income, and sales tax returns from the last 5 years
  • 2
    Correspondence from any foreign, federal, state, or local taxing authority
  • 3
    Government audits
  • 4
    Tax sharing and transfer pricing agreements
  • 5
    Net operating losses or credit carryforwards
  • 6
    Settlement documents with the IRS or other tax authorities
  • 7
    IRS Form 5500 for 401(k) plans

Examine the strategic fit of both companies

Assess each of the following to explore the extent to which the company will strategically fit your current business. 

  • 1
    HR
  • 2
    Integration
  • 3
    Transition
  • 4
    Marginal costs
  • 5
    Technology
  • 6
    Work culture

List all intellectual property & technology

Confirm that each of the following documents has been reviewed as part of the due diligence process.

  • 1
    Patents
  • 2
    Copyrights
  • 3
    TrademarksDomain names
  • 4
    Trade secrets
  • 5
    Licenses and licensing agreements
  • 6
    IP litigation and claims
  • 7
    Liens or encumbrances on the company's intellectual property

Valuate all material assets

Confirm that each of the following documents has been reviewed as part of the due diligence process.

  • 1
    Inventory stock
  • 2
    Real estate
  • 3
    Equipment
  • 4
    Technology
  • 5
    Research and development

Review all contracts

Confirm that each of the following documents has been reviewed as part of the due diligence process.

  • 1
    Customer contracts
  • 2
    Supplier contracts
  • 3
    Schedule of accounts receivable and payable
  • 4
    Guaranties, loans, and credit agreements
  • 5
    Agreements of partnership or joint venture
  • 6
    Equipment leases
  • 7
    Settlement agreements
  • 8
    Non-compete, most favored nation, and exclusivity agreements
  • 9
    License agreements
  • 10
    Distribution, dealer, sales agency, or advertising agreements
  • 11
    Franchising agreements
  • 12
    Employment contracts

Assess employees and management

Assess each of the following in order to understand the quality and structure of the company's management and employee base.

  • 1
    Review employee contracts and benefits
  • 2
    Review employee policies
  • 3
    Assess past employee issues
  • 4
    Document any future problems
  • 5
    Evaluate Target's management structure
  • 6
    Create a list of key management personnel to re-recruit
  • 7
    Create a list of key departmental personnel to re-recruit

Report all litigation matters

Review any potential legal liabilities that may be incurred as a result of the deal.

  • 1
    Pending litigation, arbitration, and regulatory proceedings
  • 2
    Threatened litigation, arbitration, and regulatory proceedings
  • 3
    Settled litigation, arbitration, and regulatory proceedings

Log all compliance and regulatory matters

Review any potential compliance issues and determine the Target company's compliance risk profile.

  • 1
    Contractual arrangements
  • 2
    Violation of fraud and anti-bribery laws
  • 3
    Anti-trust violations or conflicts
  • 4
    Data protection lapses
  • 5
    Conflict-of-interest problems
  • 6
    Target company's standards of conduct
  • 7
    Target company's compliance program and/or compliance officer
  • 8
    Compliance/regulatory training for employees
  • 9
    Adherence to health and safety regulations
  • 10
    Adherence to local laws and regulations
  • 11
    Adherence to Buyer's regulations and standard procedures

Approval: Confirm all documents have been reviewed

Will be submitted for approval:
  • Document all corporate structure & general matters
    Will be submitted
  • Assemble all financial & tax reports
    Will be submitted
  • Examine the strategic fit of both companies
    Will be submitted
  • List all intellectual property & technology
    Will be submitted
  • Valuate all material assets
    Will be submitted
  • Review all contracts
    Will be submitted
  • Assess employees and management
    Will be submitted
  • Report all litigation matters
    Will be submitted
  • Log all compliance and regulatory matters
    Will be submitted

Prepare due diligence report:

Reassess the acquisition business case

Perform a risk analysis

Compile the final report

Once the conclusions have been submitted, compile, and upload the report here. 

Approval: Report approval

Will be submitted for approval:
  • Compile the final report
    Will be submitted

Go ahead?

Sources:

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