1) At this stage, I'd focus on identifying risks.Hi, I hope everyone is well. I had a few questions about written exercises related to performing due diligence on a target company during an acquisition and would be grateful for any insight.
1) Is the typical structure focused on identifying risks and then providing solutions?
2) Is it wise to include news stories that could impact risks and solutions? For example, if there’s an employment-related issue, would it be useful to consider any recent employment legislation that might affect it?
3) Is it just legal and commercial considerations that need to be taken into account? Could anyone provide some factors that are important to consider?
I've never done something like this so just feeling super confused as to what I'll actually have to do and the structure. Thank you!
2) I wouldn't.
3) Yeah, those are the two broad categories of issues. On the legal side, examples include: change of control clauses; ongoing investigations; regulatory compliance; contracts and employment issues. On the commercial side, things like outstanding liabilities and plans to finance them. Obviously other things too - differentiation, market conditions, operational risks - but more a job for analysts.