The costs of due diligence during a Merger or acquisition are between two and five percent of the total transaction amount, depending on the sale price of a company, according to succession consulting company Kern System. Two to five percent of the total transaction amount is a lot of money. Often this money is spent on a due diligence that does not uncover the risks, that it should uncover.
Mergers and acquisitions (M&A) can be a complex process, and one of the key steps in ensuring a successful transaction is the due diligence phase. During due diligence, M&A teams carefully review and assess all aspects of the target company, including financial, legal, and operational matters. In fact, this process is crucial for identifying any potential risks or issues that could impact the overall value of the acquisition. However, conducting due diligence can also present a number of challenges for M&A teams, especially when relying on processes that are not digital.