If you're considering selling your electronic security business, preparing for the due diligence process is a crucial task to ensure a successful transaction.  Due diligence is the process through which the buyer evaluates the seller to assess risks and opportunities associated with the sale, as well as to ensure that the transaction is beneficial to both parties.

Due diligence generally includes a review of the following areas:

  • People (organizational structure, job responsibilities, compensation and benefits, HR policies, and current company culture)
  • Accounting (audited financial statements including balance sheets, income statements, and ‎statements of cash flow and other financial records‎)
  • Customers (contracts, attrition rates)
  • Operations (business processes, products, competition)
  • Real Estate (leases, facility details)
  • Legal (agreements, permits, licenses, intellectual property, government regulations)  
  • Information Technology (IT infrastructure, systems, cybersecurity policies)

Our due diligence requests range from simple yes/no answers to requests for documents, such as contracts and financial statements. Documents are typically uploaded into a secure data room with controlled secure access.  Vector Security assembles a cross-functional team from our company, and outside resources as needed, to review the information provided. After our team completes their review, there may be follow up questions, leading to additional meetings or tours of a facility as part of the assessment.

The duration of the due diligence process depends on the timeliness and quality of information from the seller.  Depending on size and complexity, the due diligence process typically takes between four to six weeks.

Confidentiality and discretion is of utmost importance throughout the due diligence process. Sensitive information will only be shared with authorized parties and will be used solely for the purpose of evaluating the transaction.

If you are thinking about selling your business at some point in the future, then you should start gathering and organizing relevant information today.  This will save you time, eliminate distractions as you continue to run your business, and cut down the time it takes to reach an agreement with a buyer.

I would be happy to send our standard due diligence request list to you.  Please let me know if you would like a copy.  And as always, if you are interested in exploring a potential transaction, feel free to contact me!

Hello! My name is Ryan Dreliszak, and I am the Director of Mergers & Acquisitions for Vector Security. We have a long history of acquiring companies and accounts over the past 30 years. We are skilled at helping you manage the due diligence process for a smooth close and transition. Let’s talk if you have any questions or would like to further discuss your business with me!