Glossary

With over 200 terms in both English and French, our M&A Dictionary is designed to help you better understand the key words and concepts related to the sale oe purchase of a business in Canada.

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Due Diligence

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Category: Mergers and Acquisitions

Definition:

Refers to the comprehensive investigation and analysis that a buyer conducts on a target company before completing a transaction. The purpose of due diligence is to assess the various aspects of the target company, identify potential risks and liabilities, and gather relevant information to make informed decisions about the acquisition. Due diligence typically covers a wide range of areas and may include a review of the target company’s financial reporting, legal elements, operations, strategy, human resources, environmental practices, and more. The due diligence process is critical for minimizing the risks associated with M&A transactions and ensuring that the buyer has a clear understanding of what they are acquiring. It allows the buyer to make well-informed decisions and negotiate the terms of the deal based on a thorough assessment of the target company’s strengths, weaknesses, opportunities, and threats.