Why Operational Due Diligence Shouldn’t Be Overlooked in Your M&A Strategy

Financial due diligence often takes center stage during M&A transactions, but there’s another critical aspect that can make or break a deal: operational due diligence (ODD). In fact, Deloitte reports that up to 60% of operational risks are missed when traditional financial due diligence is the sole focus. These overlooked risks can lead to unexpected costs, post-deal operational issues, and a significant drop in enterprise value.

ODD is about more than just reviewing operational data—it’s about understanding how the target company runs its day-to-day operations and whether those systems can scale with your growth plans. Without thorough ODD, businesses are often blindsided by operational inefficiencies that eat into the projected value of the deal.

At How2-Change, we take a comprehensive approach to ODD. Our team assesses everything from supply chains and IT infrastructure to HR policies and operational workflows. We look at how the business operates today and whether it can handle the growth required to meet your value creation goals.

For example, in a recent engagement, we uncovered significant operational issues that had been missed in the financial and commercial due diligence. By addressing these issues early, we were able to help the client renegotiate the deal, saving millions and de-risking the integration for colleagues and customers.

If you’re in the process of evaluating a target business, operational due diligence should be a priority. At How2-Change, we provide the insights needed to ensure your deal delivers the value you expect, without the hidden surprises.

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