3 – Acquisition Due Diligence

Acquisition is a powerful approach to growing your business, but it can also be fraught with risks. Most acquisitions are not worth their investment and become a drag on current business. Downeast offers diligence and acquisition planning services to help make your acquisitions successful.

All acquisitions are different and our diligence offering is scaled to the needs and situation of each acquisition. A high-level project can be completed in a few days, digging into a few uncertain aspects of an acquisition target company. A more detailed project can include detailed assessment of company functions and the creation of joint acquisition plans to be executed post-acquisition.

We are happy to discuss your prospective company purchase and where Downeast services can provide value to an acquisition.

Below are the areas of inspection of our typical diligence and key issues and questions addressed.

Financial Model

Diligence findings are integrated into a financial model that establishes objectives for the new assets, shows impact on the existing company’s financials, and highlights areas of financial risk to be managed. The Financial Model serves as an important tool for managing the new combined entity.


Quality of Revenue

Can key customer relationships and contracts support revenue projections? What efforts are needed to protect purchased revenue streams? What product risks exist?


Sales and Marketing

How effective are sales and marketing staff, processes and systems? Are revenue streams well supported, now and in the future? Is the acquired company getting adequate value from their sales and marketing spend?


Operations

Are fulfillment, customer service, services support, and other operations functions providing quality services to customers and employees? Is operations cost aligned with company approach? Are tech systems adequately supporting operations activities?

Technology

Is technology positively contributing to company performance from system quality and financial performance? Are systems reliable and available? Is IT performing from infrastructure, security, corporate systems, customer systems and development perspectives?


G&A

Are supporting functions such as finance, HR, legal, and facilities providing quality services at good cost profiles? Are supporting systems effective?


Leadership

Do company leaders have the skills and experience to contribute to the new, integrated company? What are the key employees that are needed to run the new enterprise and how should thy be retained?

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