Undergoing due diligence is an essential component of any business acquisition. This is the time when you can really look under the hood of a business and verify that everything you believe to be accurate and true about the business you’re about to purchase is indeed accurate and true.
During this phase of a business acquisition, there are some important questions you and your attorney need to address, including the following:
- What do the financial statements reveal? A company’s historical financial documents as well as its future projections are essential to understanding the full picture of the business you’re about to purchase. Review audited statements, tax returns, profit and loss statements, and more. There are myriad questions and considerations you need to take when it comes to financial matters so this is a place you should rightfully spend time doing your due diligence.
- What physical and intellectual property (IP) considerations must you take? Technology and the status of the company’s intellectual property can bring immense value to a buyer, which is why it’s important for IP issues to be thoroughly addressed prior to the sale. A buyer will want to confirm that there has been no infringement, misappropriation or violation of any IP rights. In terms of property, you’ll also want to check physical assets and real estate leases and titles, too.
- Can employee information be verified? Gaining an understanding of the company’s existing organization chart, payroll information and human resources policies will give you an opportunity to learn more about the employees themselves who will become key assets to you once the sale goes through.
- What does the customer database look like? The long-term success of your acquisition will be heavily impacted by the seller’s customer base and the amount of revenue they generate from them. It’s important to spend time learning everything you can about their existing customers and any issues or concerns related to customer risk or relationships.
These and other strategic business interests should be well vetted during the due diligence phase of a merger or acquisition. If you’re considering acquiring another company in Florida, please get in touch with us to discuss your opportunity and how we can best partner with you to achieve success. In other words – let us worry about the legal details so you can focus on the operational ones.
Contact us at Silverberg|Brito, PLLC today to schedule a free consultation.