Information Request List
In an M&A deal, the buyer (acquirer) conducts a process called due diligence to assess the target company (seller) before finalizing the deal. This involves requesting a significant amount of information from the seller. Here's a breakdown of the typical information requested by a buyer during M&A due diligence:
General Corporate:
Company Formation Documents: Articles of incorporation, bylaws, shareholder agreements, and any amendments.
Licenses and Permits: All business licenses and permits required to operate.
Minute Books: Records of all board and shareholder meetings.
Subsidiaries: Information on any subsidiaries, including ownership structure and financial statements.
Financial:
Financial Statements: Audited financial statements for the past 3-5 years, along with budgets and forecasts.
Tax Returns: Past tax returns (federal, state, local) with supporting schedules.
Debt Agreements: Information on all outstanding loans and lines of credit.
Investments: Details on any investments the company holds.
Legal:
Contracts: Copies of all significant contracts, including customer contracts, supplier agreements, leases, intellectual property licenses, employment agreements, etc.
Litigation: Information on any ongoing or past legal disputes.
Insurance Policies: Copies of all insurance policies.
Environmental Compliance: Records of any environmental permits and compliance history.
Operational:
Customer Information: Description of the customer base, contracts, and buying patterns.
Supplier Information: List of key suppliers and terms of contracts.
Inventory: Information on inventory levels and management practices.
Intellectual Property: Details on all patents, trademarks, copyrights, and trade secrets.
Employee Information: List of employees, salaries, benefits, and contracts.
Information Technology: Description of IT infrastructure, software licenses, and data security practices.
Additional Information:
Business Plans: Past and current business plans.
Marketing Materials: Marketing materials and strategies.
Risk Management Reports: Reports on any identified risks faced by the company.
Please note: This is not an exhaustive list, and the specific information requested by a buyer will vary depending on the size and complexity of the deal, as well as the industry involved.
Below is a preliminary information request list provided to clients for an engagement:
Preliminary Information Request List
# | Document |
1 | GENERAL INFORMATION |
1.1 | Any marketing collateral or other documents which may provide additional information on the operations and nature of business |
1.2 | Key domestic and regional competitors and market position, e.g. by market share, pricing, etc. relative to competitors (where available) |
1.3 | Business Profile (share structure, including outstanding ordinary shares, preference shares and other financial instruments convertible to shares, if applicable) |
1.4 | Details of key clients, including split of revenue distribution by client, product and geographies, where relevant |
1.5 | Key terms of any material contracts |
2. | HISTORICAL FINANCIAL DATA |
2.1 | Audited financial statements and/or management accounts with accompanying notes for the last 3-5 years and latest interim financial statements and/or management accounts. Historical financial data would include the following items, where applicable: - Output capacity and utilisation - Sales revenue/sales growth with details on quantity and price and by product type, where relevant - Cost of goods sold/gross margins - Selling expenses - General and administrative expenses Net working capital (including turnover ratios such as AR, AP, days inventory) Capital expenditure for business growth and fixed asset maintenance Major tax items, including tax rate and preferential tax policies, if any |
2.2 | Details of any material non-recurring items included in the historical information |
2.3 | Details of major assets together of any assets surplus to the operation of the business |
2.4 | Details of any contingent liabilities, guarantees, capital commitments and non-balance sheet items |
3. | FORECASTED FINANCIAL INFORMATION |
3.1 | Copy of budget (for current financial year) and financial forecasts (3-5 years), together with the basis and assumptions used in preparation of the budget/projections. Important forecast items would include: - Output capacity and utilisation, if applicable - Sales revenue/sales growth with details on quantity and price and by product type, where relevant - Cost of goods sold/gross margins - Selling expenses - General and administrative expenses - Net working capital (including forecast turnover ratios such as AR, AP, inventory turnover days, target inventory level) - Capital expenditure for business growth and fixed asset maintenance - Major tax items, including tax rate and preferential tax policies, if any |
3.2 | Future prospects of the business and business plans |
3.3 | Borrowing/debt-raising plan, and target or expected capital structure |
4. | OTHER INFORMATION |
4.1 | Copy of any property and/or fixed asset valuation reports prepared by third parties, where applicable |
4.2 | List of publicly traded companies considered most closely comparable to the business |
4.3 | Recent industry studies and/or analyst reports, where applicable |
How Gold House M&A can Help
"Gold House M&A" is an established M&A advisor. It is a boutique Mergers and Acquisitions advisory firm focused on Asia.
Here are some general ways Gold House M&A can assist in a deal:
Sell-Side Advisory: If you're the seller (target company), Gold House M&A can help you:
Valuation: We can determine the fair market value of your company to ensure you get the best possible price.
Marketing & Buyer Targeting: We can identify and target potential buyers who are a good fit for your company.
Negotiation: We can negotiate the terms of the deal on your behalf to maximize your benefit.
Due Diligence Support: We can help you prepare for the buyer's due diligence process.
Buy-Side Advisory: If you're the buyer (acquirer), Gold House M&A can help you:
Target Identification: We can identify potential acquisition targets that meet your strategic goals.
Deal Structuring: We can help you structure the deal in a way that is tax-efficient and minimizes risk.
Financing: We can help you secure financing for the acquisition.
Integration Planning: We can help you plan for the integration of the target company after the deal closes.
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