With roughly half of M&A deals that enter into formal due diligence failing to reach the final transaction, due diligence is key in positioning the merged companies for growth and synergy.
To maximize integration success, CXOs play a critical role in driving the vision of the combined companies throughout the sale process. They need to define core principles the company will follow, determine management style and leadership behaviors, and establish what organizational culture will look like once the transaction is complete. While this is a process that lasts throughout an entire integration, examining the target acquisition company for differences in organizational culture during diligence can help to identify opportunities for synergy early on and prevent mistakes that could result in unrealized financial gains.
Due Diligence: A Team Effort
“As an operating leader, my due diligence value is primarily in the areas of strategy, commercial and operational reviews, personnel and HR, and integration planning. I prefer to lead tasks such as management team interviews and compensation agreements, customer interviews (chosen by us, not the target), product and roadmap deep dives, site visits, commercial and operational process reviews, sales compensation reviews, and intellectual property reviews.”
— Josh Bouk, current PE-backed President and CRO