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Mergers & Acquisitions Integration Handbook: Helping Companies Realize The Full Value of Acquisitions by Scott C. Whitaker

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CHAPTER 6

The Importance of Due Diligence

In this chapter, you will learn the following:

  • The goals for the due diligence phase of integration planning.
  • A summary of the numerous documents you should consider for your due diligence assessment.

Due diligence officially occurs prior to closing (although sometimes key activities can occur after closing, but that’s not preferable). In the due diligence phase, integration leaders need to be highly engaged and preparing for the deal to close in anticipation of the integration’s official starting date.

In large mergers and acquisitions, the due diligence phase may necessitate the creation of a virtual datasite, or clean room, for the housing of sensitive documents crucial to the deal’s integration planning. Access to such a clean room would be restricted, minimizing security breaches during this critical phase so there is no margin of error.

As mentioned in the preceding chapter, a clean room is a secure space where all the applicable data for the integration is housed. Creating a clean room is one of two main methods of accomplishing document security in integration. The clean room is a place where the integration’s data are set up and monitored by security and where investors and other interested parties can spend hours, one group at a time, reviewing all the pertinent information.

The other main method of facilitating due diligence, and the better one, is the process by which companies establish a virtual dataroom (VDR). The VDR ...

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