Business Acquisition Due Diligence Checklist

1. Review audited financial statements, forecasts, and tax obligations
2. Assess legal structure, contracts, litigation and intellectual property
3. Evaluate operations, supply chain resilience, and asset ownership
4. Examine IT systems, cybersecurity posture, and digital assets
5. Review employment agreements, leadership track records, and cultural alignment
6. Assess risk management, compliance frameworks, and ESG practices
7. Plan post-acquisition integration and establish ongoing surveillance

While the high-level business acquisition due diligence checklist highlights the core areas of focus, it helps to understand what due diligence really means in the context of a high-stakes acquisition.

Core documents include:

• Balance sheets: These documents are reviewed to evaluate assets, liabilities, and equity positions.
• Income statements: These statements are analyzed to understand revenue streams, margins, and expense trends.
• Cash flow statements: These records are assessed to verify liquidity, debt service capacity and sustainability of operations.

Projections matter as much as historical data. Buyers need to test the assumptions behind revenue forecasts and expense models. Are margins consistent with industry norms? Are there unexplained revenue spikes? A sudden increase in sales just before a deal can be a red flag for aggressive accounting.

Working capital analysis is equally critical. Insufficient working capital signals immediate post-acquisition funding requirements. Conversely, excess receivables may indicate collection problems that will strain future cash flow.

Debt and tax obligations deserve close scrutiny. Undisclosed loans, deferred obligations or payroll tax arrears can become the acquirer’s problem overnight. This is where tax due diligence goes deeper, verifying not only compliance with current obligations but also exposure to audits, liens or disputes.

Alias helps clients stress-test financial diligence by layering on intelligence that goes beyond documents. Discreet source checks can validate whether reported customer contracts actually exist, or whether a sudden jump in revenue is tied to a one-off deal that will never recur.

Key considerations include:

• Supply chain dependencies: Overreliance on a single supplier or region introduces concentration risk.
• Operational processes: Assessing manufacturing, logistics and customer service systems for efficiency and risk exposure.
• Asset verification: Reviewing property, equipment and inventory to confirm ownership, valuation and condition.

Technology diligence has grown in importance, particularly given cybersecurity risks. Buyers should also evaluate:

• IT architecture and infrastructure: Information technology systems are reviewed to confirm compatibility with the acquirer’s systems and readiness for integration.
• Cybersecurity posture: Data protection protocols, penetration test results and incident history are evaluated. The global average cost of a data breach reached $4.44 million in 2025, according to IBM’s Cost of a Data Breach Report. Even one vulnerability can undermine the gains of an acquisition.
• Software licenses and IP ownership: Software licenses are verified to ensure the company has rights to the systems that underpin its operations.
• Digital assets and roadmaps: Proprietary data, research and development pipelines and technology roadmaps are assessed to confirm alignment with the buyer’s digital strategy.

Integration planning should begin before the ink is dry. Operational and technology due diligence provides the foresight needed to map an integration path early. Alias adds value by discreetly verifying operational claims that may not align with reality.

Buyers should review:

• Internal controls and audit processes: They are examined to confirm that financial and operational risks are being managed effectively.
• Compliance frameworks: Anti-bribery, data protection and sanctions are reviewed to ensure adherence to regulatory obligations.
• Insurance coverage and claims history: Insurance policies and claims history are evaluated to understand how risks are mitigated and transferred.
• ESG practices: Environmental, social and governance practices are assessed, including environmental compliance, labor standards and governance structures.

Alias helps clients stress-test ESG claims with independent verification. A company may advertise sustainability, but discreet inquiries can reveal labor disputes at overseas facilities or questionable sourcing practices.

Why a Diligence Checklist Isn’t Enough

A diligence checklist organizes the review, but by itself it’s not a safeguard. Deals fail when diligence is treated as a mechanical exercise instead of a dynamic investigation. Spreadsheets and data rooms can’t capture whether leadership is credible or whether a key relationship is about to unravel.

That’s where Alias Intelligence distinguishes itself. Beyond reviewing documents, Alias brings:

• Discreet source inquiries to surface leadership and reputational insights
• Near-24/7 client support for tight deal timelines
• Rapid turnaround times of three business days for core reports and seven for enhanced due diligence
• A secure System and Organization Controls (SOC) 2 Type 2–certified portal for sensitive data.
• Flexibility in pricing, terms and client-specific needs.

Alias has completed more than 40,000 domestic and international investigations across background and corporate due diligence. Its ability to combine investigative depth with client-focused flexibility makes it an indispensable partner for transactions where risk tolerance is low and stakes are high.