TOOLS: GENERAL DUE DILIGENCE LIST
By Manish Kumar Maheshwari
Investment Bankers / Management Consultants are often asked for the basic framework of what makes up a reasonable Due Diligence information pack. Provided below is a very basic high level outline of potential information for inclusion.
- Executive summary on Operations of business.
- Copy of business plan, and if in existence separate plans (Marketing, Finance, I.T., Sales etc,).
- Copies of marketing information and other corporate brochures.
- Company structure detailing all companies in the group (including subsidiaries or companies in which investment).
- Certificates of incorporation, Articles of Association & any shareholder agreements.
- Register of shareholders and any other security holders (convertible notes, etc.).
- Key commercial contracts including with suppliers, clients, financiers, landlords, etc.
- Information on any litigation in which the company is involved.
- Copies of ant intellectual property including patent, trademark, copyright, URL. etc.
- Copies of Management contracts, bonus schemes, option schemes, etc.
- HR matrix detailing all employees, contractors, consultants, etc.
- Human Resource gap analysis discussing where next hires in business would be.
- Location of all operations & explanation of role of each.
- Utilization & capacity of each facility.
- Age & condition of facilities including discussion on potential upgrades.
- List of suppliers & customers (which can be sanitized).
- Financial Statements for the previous 3 years (preferably audited).
- Current and forecast budgets.
- Tax returns from previous 3 years.
- Capital expenditure programme for current, previous and forecast years.
- Asset Register.
- Breakdown of clients on a % basis to contribution of revenue.
- Information of software Licenses.
- Discussion paper on redundancy and disaster recovery.
- Copies of any I.T. audits conducted.
- Information on data management procedures.
- Any environmental issues?
- Include competitor analysis.
- Include Industry research.
- Include other relevant & material documents.
The establishment of a detailed Due Diligence programme is a critical step in any Corporate Finance process.