M&A due diligence

We conduct financial, tax, commercial, operational, IT and cyber diligence to help you identify transaction value drivers, improve deal structures and mitigate risks. We also help challenge assumptions about future performance so you can choose the right valuation.

Related topics Strategy and Transactions Strategy Private equity Mergers and acquisitions

The team

Bridget Walsh

Bridget Walsh

EY Global Private Equity Industry Market Leader

What EY can do for you

We conduct diligence in the following areas to help you answer questions about the value drivers of your deal.

  • Commercial due diligence

    • What is the strategic rationale for this deal and what makes this target attractive?
    • What incremental markets, customers or sales channels will be created or accessed by this acquisition?
    • How does this transaction enhance our brand or market position?

  • Financial risk due diligence

    • Do historical reported results accurately reflect run-rate profitability? Do you have the right data to support your forecast?
    • What factors, if any, will affect the purchase price?
    • What balance sheet and off–balance sheet exposures concern us most?
    • How could accounting issues materially affect reported results or disclosures after closing?

  • Human resources due diligence

    • How will changes to peoples’ roles, responsibilities, and hierarchies inform the overall organization’s design?
    • How will compensation and benefits programs that align to the future state vision be designed, implemented and rolled out to employees?
    • What targeted actions must we take to align leaders, the business, and employees to create a seamless onboarding experience?

  • IT due diligence

    • How do we plan and prepare for Day One to minimize business disruption and enable IT connectivity between buyer and acquired company?
    • How can we leverage the merger as a catalyst for IT transformation?
    • How can we assess existing IT capabilities for access to new markets and operational improvements?

  • Operations and synergies

    • What is the source of synergies and how are they quantified?
    • What are the key Day One and post–Day One operating risks and priorities?
    • What synergies are available (revenue, cost, tax, balance sheet, etc.)?
    • Are appropriate plans in place to implement and capture synergies?

  • Regulatory due diligence

    • What regulatory issues could threaten compliance or erode transaction value?
    • How could potential regulatory changes affect the target’s ability to achieve projected growth?

  • Cybersecurity

    • How will we protect company information and assets while integrating infrastructure and critical applications?
    • Where are the acquisition’s IT security vulnerabilities?

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  • Valuation, modeling & economics

    • Is the purchase consideration complicated?
    • Is the board protected through an outside opinion of value?
    • Are the impacts of opening balance sheet valuation adjustments clearly understood?
    • Will tax structuring require a thoughtful understanding of value to achieve maximum efficiency?

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  • Transaction tax

    • Do we have a tax-efficient structure to deliver the commercial objectives and investment basis of the transaction?
    • Is there a globally coordinated approach for tax risk and controversy?
    • Have we considered the tax implications as digital technology changes business strategies, models and supply chains?

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