Due diligence is the act of reviewing information to ascertain the value of data presented by checking for compliance and/or investigate the desireability, value and potential of an investment. The act may include the financial, legal, labour, tax, IT, and commercial situation of the company and may include such areas as intellectual property, real and personal property, insurance and liability coverage, among others.
Prior to any merger or acquisition, due diligence must be performed to determine that the information about the company to be acquired is correct, accurate, and properly disclosed. In addition due diligence can highlight any weak areas or critical issues. This may help management reach a buy/no-buy decision.
Normally the process of due diligence is carried out by a team of experts covering various areas. Areas covered may include:
Companies may however lack expertise in certain areas, where the need for employing the services of external consultants becomes necessary. Michor Consulting is specialised in carrying out due diligence in the life science sector.