Due Diligence Memorandum
(M&A Transaction)

Summary

This is a due diligence memorandum used to summarize the results of a buy-side due diligence investigation for the acquiror in an M&A transaction. This template includes practical guidance and drafting notes. Buy-side due diligence generally culminates in the preparation of a due diligence memorandum. A due diligence memo aggregates and discusses the findings of the buyer's counsel's due diligence investigation of the target company or seller. Although due diligence memos usually include an introduction and executive summary, the bulk of the memo is dedicated to presenting the results and findings of the buyer's counsel's due diligence investigation, organized by subject area. A due diligence memo should identify specific risks and issues identified during due diligence, but should be neither overly granular nor overly simplistic, and should adopt a tone appropriate for its audience (i.e., the buyer and its management team). Although the final memo is usually prepared by the principal M&A practitioners on the deal team, legal specialists are typically tasked with preparing content for their respective sections and subject areas of the memo. A due diligence memo may also incorporate third-party reports and search results (e.g., lien searches, title reports, Phase I reports) and other pertinent documents prepared during the due diligence investigation, like summaries of the target's material contracts. This template may be used in connection with any M&A transaction, regardless of deal structure. This template assumes that other professionals, such as accountants and financial advisors, will prepare and deliver to the buyer their own separate due diligence reports or memoranda, and does not address tax or financial due diligence. For a comprehensive listing of due diligence resources, including due diligence request lists and organizational aids, see Due Diligence Resource Kit. For a thorough discussion of the preparation and use of due diligence memoranda, see Due Diligence Work Product in M&A Deals — Due Diligence Memorandum. For a broad collection of content related to tasks that may be assigned to an M&A summer associate, see Summer Associate Resource Kit: Corporate and M&A.