Digital Due Diligence
The purpose of due diligence as part of the M&A process is to identify and assess assets and risks. Historically, due diligence has focused on the assessment of a company’s financials, management and operations, legal compliance, and documentation related to the transaction. However, in this digital age, when companies merge or are acquired, there are digital asset considerations, and the new issue of “digital debt.” This makes digital due diligence a critical part of the process.
Understanding the value of a company’s digital assets, in addition to the level of risk and digital debt will help to ensure both a proper valuation of the company’s digital assets, as well as the potential risks, cost and timeline to integrate a company’s digital presence, systems, data and vendors.