Next Generation Due Diligence

From a detailed and comprehensive article by Charles Francis Bacon [via Mondaq] (free registration required):

"Some critical aspects of a corporate due diligence audit should include:

accounting systems and internal controls
analysis of present and future products and services
assumptions for projections
attendance at seminars, conferences and shows
business plans
brand and reputation
capital expenditures
competitive intelligence
computer systems and capabilities
contracts
corporate acquisition candidates
corporate budget
corporate culture
credit-reporting
customers
decision processes
disaster recovery
employee benefit systems
employee hiring and retention
employee satisfaction
equity compensation
external market environment assessment
financial analysis
financial statements
future earnings stream
future expansion projects
industry publications
insurance
intellectual property policies and assets
internal communications strategy and media
internal and external business documents
internal audit function
key relationships
key senior positions
litigation and administrative actions
management communications
management systems
management succession systems
market research
marketing research
methods of evaluating existing and new products and services
methods of marketing and sales, pricing and pricing strategy
new products and services investment evaluation
objectives and objectives set for the business
organisation chart, existing team and planned team growth
organisation development
outside contractors
outside professional firms
performance reviews
personnel training and development
plans for new locations
press interaction
relationships with vendors, suppliers, and alliances
research and development
sales and marketing relationships
strategic planning process
strengths and weaknesses of the organisation
technologies in use by the organisation
technology trends

This list is long, but far from all-inclusive and should not limit all the aspects that must be considered for a complete corporate due diligence audit. The important thing is to 'think' comprehensive, integrated and interrelational."

Consider R&W Insurance

"'Representation and warranty' insurance, which has emerged for use in M&A transactions, may be a possible solution to deal with unknown risks that could otherwise make the parties walk away from a proposed transaction...This insurance can be useful in many circumstances, including these:

when a seller wants limited or no exposure to unknown risks that could give rise to post-closing claims for indemnification;

as an alternative to an escrow arrangement, when a buyer is concerned that a seller has inadequate creditworthiness to honour its indemnification commitment;

when a buyer may not want to pursue an indemnification claim against a seller for business reasons (such as when the buyer is to employ the seller).

Either the buyer or the seller can obtain representation and warranty insurance and, depending on the circumstances, may do so without the other’s knowledge..."

Read more in this Torys LLP article from Mondaq.