ABSTRACT
Due diligence is obviously only one part of an acquisition or investment exercise. Successful due diligence leads to negotiation and, if all goes well, the deal completes. As far as due diligence is concerned, the critical thing about signing Heads of Agreement is that there is a deal underway. Due diligence assesses the deal from a commercial, financial and legal point of view. Due diligence feeds into the negotiations by identifying risks against which the buyer should negotiate some sort of protection. Due diligence is the way buyers make sure they understand exactly what they are buying. The dealmaker sees due diligence as an aid to working out what contractual protection is required from the vendor and what risks the purchaser should avoid completely. Due diligence is going to look out for vulnerabilities but at least equal importance needs to be given to identifying opportunities. Due diligence should be seen as integral to post-acquisition planning.
