Good Due Diligence requires?

Before every Merger and Acquisitions a report called Due Diligence report is prepared for the purpose of examining the potential ability of the target company for many reasons. This Due Diligence report will helps an acquirer firm to make a decision whether to go further or not for making a merger or acquisition.

In short a good due diligence is done to find out the target customer's costs and capabilities, competitors, competitive advantages, market share etc.  This should contain the accurate knowledge about the target company, information like

• The Size and Growth rate of the Target Market: This will give an idea which area the company has to concentrate in the future, which products and markets have better scope where with the capabilities available which market can be tapped etc.
• The target company's rank among the competitors and what the intensity of the competition along with market share, revenue, profit within each segment. This information will helps in figuring out the future scope of growth and market share more accurate 
• Cost efficiency aspects what already possessed and what the competitors have initiated, where the measures can be identified which can be incorporated in the future post acquisition, and the amount of further investment required can be measured out of it.  To further change the target companies and existing strategies the company's capabilities, competencies, and technologies has to be taken in consideration for the purpose of further investment or make use of the present existing resources to the best possible way.
• To carry Mergers & Acquisition the acquirer has to take lots of things into consideration before stepping in, whether the M&A will lead to a diversification, either related or unrelated diversification. Any of them a proper synergy has to be formed for the best use of the diversification or reinforcement.