The Missing Link in Most Merger and Acquisition Due Diligence
To be effective an M&A due diligence requires assessments of the legal, financial, and operations facets of a business. The financial assessment relies heavily on a past performance analysis of the business while the legal assessment looks at the current structure and outstanding liabilities of the business. Neither of these, however, looks in any detail at the future sustainability of the business. Determining the longterm sustainability of a business is the role of Operations Due Diligence (ODD) which requires an assessment of the infrastructure that supports the sustaining operations of the business. Unfortunately ODD is often the weak link in the M&A process and one of the leading causes of M&A failure. Given the high rate of M&A failures , it's hard to understand why any investor would consider putting millions of dollars into a business based solely on performing the financial and legal assessments without also performing an enterprise wide operations asses...