Due Diligence
Definition
Due diligence is the investigation a buyer performs on a target company before completing a deal: verifying the financials, contracts, customers, legal exposure, and everything else the price depends on. It is the "trust, but verify" phase of M&A.
In practice
Diligence runs in workstreams (financial, legal, commercial, tax, technology) and lives in the data room. The findings feed directly into price adjustments, indemnities, and sometimes a decision to walk. Deals are rarely killed by what diligence finds; they are killed by what it fails to find, later.