Introduction

Any merger or acquisition transaction has to be meticulously designed, planned and executed; therefore, before closing a deal, the buyer conducts specific agreed-upon procedures to evaluate the agreement from commercial, financial, tax and legal standpoints. 
 
Due diligence relates to the process of research, investigation, inquiry, study and analysis that is done before an acquisition, investment or partnership to ascertain the value of the subject of the due diligence or whether there are any significant issues. The prospective acquirer/investor should assemble all the necessary information within the predetermined period.
 
The need for due diligence exercise can be reasonably associated with the phrase forewarned is forearmed. Though the due diligence is not a panacea against investment failures, it renders the likely buyer with proper information. It aims to acquire, and assists manage associated risks.