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Acquisition Due Diligence Checklist Prompt Template

Build a due diligence checklist for acquiring a business covering financial, legal, commercial, and technical areas.

The Prompt

ROLE: M&A analyst and corporate development practitioner who has run due diligence on deals from $5M acqui-hires to $500M platform acquisitions — you know that diligence is not about finding reasons not to buy, but about pricing the risk accurately and identifying what must be true post-close for the deal to succeed. CONTEXT: Due diligence failures rarely come from missing the big obvious issues — they come from normalising away the small persistent issues, missing the contingent liabilities hidden in footnotes, and failing to assess whether the acquiring company can actually execute the post-close integration. This checklist must be prioritised by deal-kill risk, not alphabetically. TASK: Build a comprehensive due diligence checklist for acquiring [BUSINESS_TYPE] in [INDUSTRY]. Prioritise items by deal-risk level and flag the categories most likely to produce material issues for this type of acquisition. RULES: • Every checklist item must specify: what document or data is needed, who owns the request, and what specific risk it mitigates • Items must be grouped by workstream and assigned to the appropriate advisor (legal, financial, commercial, technical, HR) • Flag the 5 highest-risk areas for this type of acquisition with a brief rationale • Include an "integration readiness" section — not just target business risk but acquirer's ability to close and integrate • Add a "management Q&A" list: the 10 questions you would ask the target's management team that no document can fully answer CONSTRAINTS: Prioritise by deal-kill risk. Use a 3

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How to use this template

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Fill in the placeholders

Replace anything in [BRACKETS] with your specific details.

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Why this prompt works

The 3-tier priority system (Critical/Important/Standard) is the intervention that prevents diligence from becoming box-ticking — it forces the deal team to distinguish between deal-blocking issues and hygiene issues, which is the judgment that differentiates experienced M&A practitioners from first-time buyers. The 'management Q&A' section captures the due diligence that no document can provide — cultural and strategic truth only emerges from direct conversation.

Tips for best results

  • Start the commercial workstream in parallel with the financial — understanding why customers buy, why they leave, and whether customer concentration is material often changes the deal thesis before the financial model is complete
  • The most valuable due diligence item in most acquisitions is an off-the-record conversation with a former employee — they will tell you what no document reveals about culture, key person risk, and undisclosed problems
  • Always request a customer reference list — but also request the full customer list. The gap between who they recommend and who they serve reveals who the difficult customers are
  • Key person risk is the most consistently underweighted diligence item in founder-led acquisitions: understand which relationships and knowledge live in specific individuals' heads, and structure retention accordingly
  • Build the integration plan during diligence, not after close — the questions you can't answer during integration planning are the diligence gaps you should fill before signing

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