Private equity due diligence checklist
145 specific requests across 12 workstreams, from the QoE bridge and NWC peg to TSA scope and the 100-day plan. Filter to the deal you are running, mark each request as it moves from requested to reviewed, and export the list for your data room tracker.
Financial & QoE
0/17 · 0%- Audited financial statements for the last 3 years, with auditor management letters and any qualifications
- Monthly management accounts for the last 36 months, reconciled to the audited annual figures
- Quality of earnings report: reported to adjusted EBITDA bridge with support for every adjustment
- Run-rate and pro forma adjustments (cost savings, new contracts, price increases) separated from historical normalisations
- Net working capital analysis: monthly NWC for 24 months, seasonality and a proposed peg methodology
- Net debt and debt-like items: leases, deferred revenue, unpaid bonuses, accrued taxes, deferred consideration, factoring
- Revenue recognition policy review, including cut-off, multi-element contracts and bill-and-hold arrangements
- Proof of cash: bank statements reconciled to reported revenue and cash receipts for at least 12 months
- Gross margin bridge by product, customer and channel with explanations for movements
- Capex split between maintenance and growth, with 3-year history and forward plan
- Budget vs. actual for the last 3 years to assess forecasting accuracy
- Management forecast and key assumptions, with current-year trading versus budget
- Aged receivables and payables, bad debt history and credit notes issued after period end
- Inventory valuation, obsolescence provisions and the results of the last physical count
- Related-party transactions and owner expenses run through the business
- Standalone cost base: allocated parent costs replaced with a stand-alone run-rate estimate
- Carve-out financial statements: basis of preparation, allocation methods and auditor involvement
Tax
0/12 · 0%- Corporate income tax returns and assessments for all open years in every jurisdiction
- Tax audits, inquiries and disputes, open or closed in the last 5 years
- Sales tax / VAT nexus and compliance review, including remote sales and marketplace rules
- Payroll tax and contractor classification exposure
- Transfer pricing policy and documentation for intercompany transactions
- Tax attributes: net operating losses, credits and any limitations triggered by the change of control
- Transaction structure options (share vs. asset deal, step-up, elections) and their after-tax value
- Tax indemnity, escrow and W&I coverage for identified exposures
- Withholding tax on dividends, interest and royalties, and treaty eligibility of the holding structure
- Tax treatment of transaction costs and management equity
- Owner-level tax positions affecting the target (S-corp status, personal use of company assets)
- Tax separation from the seller group: consolidated return exits, tax-sharing agreements, pre-close liabilities
Legal & corporate
0/13 · 0%- Corporate structure chart, constitutional documents and a complete capitalisation table
- Shareholder agreements, options, warrants and convertible instruments; any rights triggered by the deal
- Board and shareholder minutes for the last 3 years
- Material contracts with change-of-control, exclusivity, non-compete or most-favoured-nation clauses
- Litigation, claims and threatened disputes, with counsel's assessment of exposure
- Existing debt agreements, security interests and lien searches
- Intellectual property register: patents, trademarks, domains, and ownership of software and content
- Invention assignment and confidentiality agreements from employees and contractors who created key IP
- Open-source software usage and licence compliance for proprietary code
- Guarantees, indemnities and comfort letters given by the company
- Founder side agreements, verbal commitments and promises to employees outside written contracts
- Assets, contracts and IP to transfer from the seller group, and third-party consents required
- Transitional services agreement scope, pricing, duration and exit provisions
Commercial & customers
0/14 · 0%- Market size, growth and segmentation, validated against independent sources
- Competitive landscape and the target's share and positioning by segment
- Customer concentration: top 10 and top 20 customers by revenue and gross margin for 3 years
- Customer cohort retention, churn and net revenue retention by vintage
- Customer contracts for the top 20: term, renewal, termination rights, pricing and change of control
- Customer reference calls, including lost and churned customers
- Pricing history, price elasticity and evidence of realised price increases
- Sales pipeline, conversion rates and bookings vs. revenue reconciliation
- Backlog and contracted revenue, with recognition timing
- Channel and distributor dependence, with contract terms
- Brand, NPS or customer satisfaction data and complaint logs
- Founder or owner personal relationships with key customers and how they transfer
- Customer and cross-sell overlap with the platform; revenue synergy assumptions
- Shared customers and contracts with the seller group, and how they will be split
Operations & supply chain
0/12 · 0%- Site-by-site operating overview: capacity, utilisation and headcount
- Supplier concentration: top 10 suppliers, terms, alternatives and single-source risks
- Key supply contracts: pricing mechanisms, volume commitments and change of control
- Input cost exposure (commodities, energy, freight) and pass-through ability
- Quality metrics, returns, warranty claims and product recalls for 3 years
- Condition of plant and equipment, deferred maintenance and the capex required to sustain operations
- Operational KPIs: on-time delivery, yield, scrap, lead times
- Inventory management, SKU rationalisation opportunities and slow-moving stock
- Business continuity and disaster recovery plans for critical sites
- Logistics network and third-party logistics contracts
- Shared sites, equipment and procurement contracts with the seller group
- Procurement and footprint synergies with the platform, with a phased savings plan
People & HR
0/13 · 0%- Organisation chart with headcount, tenure, compensation and location for all employees
- Key employee identification, retention risk and existing retention arrangements
- Employment agreements for senior management: non-compete, notice, change-of-control payments
- Management assessment: capability of the team to deliver the value creation plan
- Compensation benchmarking and bonus or commission plans, including accrued but unpaid amounts
- Pension and post-retirement obligations, funding status and actuarial valuations
- Employee claims, grievances, harassment complaints and settlements for 3 years
- Union and works council agreements, consultation requirements triggered by the deal
- Employee turnover by function and level for 3 years
- Contractor and consultant use, and misclassification risk
- Immigration status and work authorisation for key staff
- Founder succession: who runs the business day to day once the founder steps back
- Employee transfer mechanics, benefit plan replacement and in-scope employee list
IT & cybersecurity
0/12 · 0%- IT systems map: ERP, CRM, finance, HR and operational systems, with versions and owners
- Cybersecurity assessment: penetration test results, vulnerability scans and remediation status
- Security incidents, data breaches and ransomware events in the last 5 years
- Data protection compliance (GDPR, CCPA or local equivalents) and records of processing
- Access controls: MFA coverage, privileged account management and leaver processes
- Backup and recovery testing, recovery time and recovery point objectives
- IT spend, headcount and outsourcing contracts
- Software licences: compliance, true-up exposure and transferability
- Technical debt and planned upgrades (end-of-life systems, unsupported software)
- Product and engineering review for software businesses: architecture, scalability and code quality
- IT separation plan, data migration and TSA dependencies for systems shared with the seller
- Systems integration path to the platform's ERP and reporting stack
Insurance & risk
0/10 · 0%- Schedule of insurance policies: coverage, limits, deductibles and premiums
- Claims history and loss runs for 5 years
- Adequacy of cover for key risks: product liability, professional indemnity, cyber, D&O
- Warranty and indemnity insurance: underwriting scope, exclusions and retention
- Occurrence-based policies and run-off or tail cover needed after closing
- Key-person insurance and its treatment at closing
- Insurance coverage provided under the seller's group programme and the stand-alone replacement cost
- Enterprise risk register and top risks identified by management
- Credit insurance or customer credit risk controls
- Contractual insurance requirements in key customer and lease agreements
Environmental & ESG
0/10 · 0%- Phase I environmental site assessments for owned and leased operating sites
- Environmental permits, compliance history and notices of violation
- Known contamination, remediation obligations and asbestos surveys
- Health and safety record: incident rates, fatalities, regulator inspections
- Scope 1 and 2 emissions baseline and energy consumption
- ESG policies and any LP reporting requirements the asset must meet (e.g. SFDR, ILPA ESG data)
- Supply chain human rights and modern slavery due diligence
- Anti-bribery and corruption policies, training and third-party agent screening
- Climate-related physical and transition risks to sites and products
- Diversity and governance data for the board and workforce
Real estate
0/9 · 0%- Schedule of owned and leased properties with use, size, rent and expiry
- Leases: assignment and change-of-control clauses, break options, rent reviews and dilapidations
- Title reports and encumbrances for owned property
- Property condition surveys and deferred maintenance
- Zoning and planning compliance for current and intended use
- Sale-and-leaseback opportunities and valuation of owned real estate
- Properties leased from the founder or related parties, at market terms or not
- Shared or co-located sites with the seller, and licence or sublease arrangements
- Footprint overlap with the platform and consolidation opportunities
Regulatory & compliance
0/10 · 0%- Licences, permits and registrations required to operate, and whether they transfer on a change of control
- Regulatory inspections, warning letters, fines and enforcement actions for 5 years
- Merger control and foreign investment (e.g. HSR, CFIUS, NSIA) filing analysis and timeline
- Sanctions and export control screening of customers, suppliers and jurisdictions
- Industry-specific regulation (healthcare, financial services, food, defence) and pending rule changes
- Compliance programme: policies, training records, whistleblower reports and investigations
- Anti-money laundering and know-your-customer procedures where applicable
- Product certifications, labelling and marketing claims compliance
- Government contracts and any small-business or set-aside status that the deal could affect
- Data and privacy regulator correspondence and complaints
Integration & 100-day plan
0/13 · 0%- Value creation plan with quantified initiatives, owners and timing tied to the investment case
- 100-day plan: governance, reporting cadence, quick wins and key hires
- Closing-day readiness: funds flow, bank mandates, signatories, communications to staff and customers
- KPI dashboard and monthly reporting pack agreed with management before closing
- Board composition, committee charters and delegation of authority matrix
- Management incentive plan design and allocation
- Finance function upgrade: close timetable, controls, audit readiness
- Risk-adjusted synergy case with one-off costs to achieve
- Integration management office, workstream leads and day-one integration checklist
- Stand-alone readiness plan: TSA exit timeline and stand-up of functions previously provided by the seller
- Professionalisation plan: CFO hire, formal budgeting and delegation away from the founder
- Post-closing purchase price adjustment and completion accounts timetable
- Lender reporting and covenant compliance calendar
Run diligence as a tracked workflow.
In Acquifolio each request has an owner, a due date and its evidence file, and critical findings must be resolved before the committee decides.
A general checklist to adapt to each deal; it is not legal, tax or accounting advice. Status is saved only in this browser and is never sent anywhere. Shared links carry your filters, not your progress.
How it works
Every item has a workstream, a priority and, where it only applies to some deals, a deal type:
- Critical items can change price, structure or the decision to proceed (QoE adjustments, net debt, customer concentration, change-of-control consents).
- High items usually feed the SPA, the 100-day plan or the insurance and indemnity package.
- Standard items complete the picture and are often covered in the data room.
Choosing a deal type adds the items specific to carve-outs (stand-alone costs, TSAs, separation), add-ons (synergies, integration) or founder-owned businesses (related parties, succession) on top of the general list. An item counts as complete once it is Reviewed or marked N/A.
Progress is saved in this browser only. The CSV export includes empty Owner, Due date and Notes columns so you can drop it straight into a request list.
Questions
What are the main workstreams in private equity due diligence?+
Financial (quality of earnings, working capital, net debt), tax, legal, commercial, operations, HR, IT and cybersecurity, insurance, environmental and ESG, real estate and regulatory. Integration and 100-day planning should run in parallel rather than after signing.
What should be prioritised first in a buyout diligence process?+
Items that can change the price or kill the deal: the QoE bridge from reported to adjusted EBITDA, net debt and debt-like items, the NWC peg, customer concentration and contract change-of-control clauses, litigation, and any licence that does not transfer on a change of control.
How is carve-out due diligence different?+
A carve-out has no stand-alone history. You need carve-out financials with clear allocation methods, a stand-alone cost estimate to replace parent allocations, a list of shared contracts, sites and systems to separate, and a transitional services agreement with pricing and a realistic exit timeline.
Can my team work on this checklist together?+
This page saves status in your browser only. Export the CSV to share it, or use a shared link to send colleagues the same filtered view. For tracked requests with owners, due dates and evidence, a deal workspace is the better fit.
Diligence & closingEV to Equity Value Bridge
From headline enterprise value to the cash the seller actually receives: net debt, debt-like items, NWC true-up.
Open tool Diligence & closingWorking Capital Peg CalculatorSet a normalized NWC target from monthly balances, see seasonality and the closing purchase price adjustment.
Open tool Diligence & closingEarn-out CalculatorProbability-weighted, discounted value of an earn-out and the effective multiple you really pay.
Open toolFree tools for one-off math. A workspace for the whole deal.
Create a workspace Acquifolio connects sourcing, diligence evidence, the investment committee, the portfolio and your LPs, so every number keeps its source.