Sizing the review to the deal
Not every acquisition needs the same depth of review. Buying a competitor raises antitrust and employee questions, acquiring a business with regulated licenses raises transfer and approval questions, and buying a technology company turns attention to who owns the code and data. Defining the scope early, around the issues that would actually change your decision, keeps diligence focused and its cost under control. The seller's timetable should not dictate the scope, although a realistic plan helps keep the deal on track. Buyers entering a regulated industry should ask early whether any approval is needed before closing, since that can set the timetable for everything else.
Findings that change the deal
Diligence findings usually lead to a price change, a specific indemnity or escrow, a closing condition, a different structure, or occasionally a decision to walk away. A customer contract with a change-of-control clause may need consent before closing. Unpaid taxes or misclassified workers may push a buyer toward an asset purchase or a special indemnity. Pending litigation may need to be valued or carved out. If representations and warranties insurance is part of the deal, the insurer will review the diligence and may exclude known issues, so problems that turn up have to be handled in the agreement rather than left to the policy. Findings that cannot be priced or fixed are worth raising with your board or investors before signing rather than after.
Planning past the closing date
Diligence also feeds the integration plan: which contracts need notices or consents, which licenses and permits must be transferred or reissued, which employees are key, and which systems must be connected. Starting that list during diligence avoids surprises after closing. Useful starting materials are the letter of intent, the data room index, and your internal goals for the acquisition. With those, we agree on the scope of review, the team, and the timetable, and flag the issues most likely to affect signing.
