Investors instinctively understand the importance of performing legal and financial M&A due diligence. Things tend to come off the rails though when it comes to performing an operations due diligence. Most investors simply don’t understand the role of operations due diligence and the result is that most M&A failures can be traced back to an ineffective operations assessment. Legal and financial due diligence are performed to determine the legal and financial status of a business at a point in time, typically the day a deal is closed. Operations due diligence on the other hand is determines the ability of the business to sustain its operations over time. It asks: Are there potential operations risks that could cause a future failure of the business? Investors rely on their attorneys and CPA’s to perform their legal and financial due diligence, but often attempt to perform the operations due diligence themselves instead of … Read More

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