Acquisition Evaluation Checklist

This Sample Acquisition Checklist is incredibly detailed and comprehensive. Below is one small example of the type of information in the checklist:

"RESEARCH, DEVELOPMENT AND ENGINEERING QUESTIONS

Occasionally, a company that is looking to be acquired will eliminate costs that represent a drain on current earnings, but are essential to long-term product development. It is not enough to depend on a target’s past record of success in this area; instead, you must look closely at its current research and engineering capabilities to make sure it is being maintained at the same high level.

1. Do you know the quality of product, process and market research in the company/ Compare it to that is the industry as a whole.

2. Are you familiar with the industry’s basic source of effective research?

3. Have you reviewed industry expenditures for research and how the company’s research expenditures compare?

4. Do you know what the company’s policy has been on research and development? Review the percentage of sales it has been spending on research and development, any significant new products under development and the known R&D activities of competitors.

5. Have you evaluated the company’s technical activities and services by classification (e.g., contract services customer services, company R&D, manufacturing engineering, tool design, product engineering)?

6. Have you reviewed the current and proposed staffing and personnel requirements for each activity?

7. Do you know the methods of authorization, funding and reporting for product engineering, and company R&D, related to overall research plans and market requirements?

8. Have you assessed the caliber of the research staff? Find out if the staff has dealt with long-term research as well as day-to-day product engineering.

9. Has the research program actually produced any new products during the past five years?

10. For contract engineering, are you familiar with the programs, their tie-in to products, and their follow-up on prospects?

11. Do you know the relationship of customer services to market activity, product sales and profitability?

12. Have you assessed the type, condition and adequacy of engineering space and laboratories?

13. Are proprietary rights on all products under development adequately secured by the company?

14. Are you aware of any patents and trademarks held or that have been applied for?

15. Is the company protected in foreign as well as U.S. markets?

16. Do agreements exist under which the company is licensee or licenser? Find out what the estimated royalties are.

17. Are any key patents held by shareholders, management or other individuals? Find out if the company’s rights to these patents are satisfactory.

18. Are any infringement suits or claims outstanding?"