Due Diligence Guide

Before receiving any financial data, execute a bilateral NDA with the seller. Use our template in the Legal Templates section.

Request the full Information Memorandum (IM) — this should include: business overview, 3-year P&L, customer concentration, and key contracts.

Schedule a 30-minute call to assess seller motivation, timeline, and deal-breakers. This saves time on both sides.

P&L, balance sheet, and cash flow statements. Prefer audited accounts — if not available, ask for bank statements as a cross-reference.

Identify owner's salary, one-time costs, and personal expenses run through the business. Adjusted EBITDA is the real earnings multiple base.

Review AR aging report. High overdue receivables are a red flag. Check AP to understand payment obligations at closing.

If more than 20% of revenue comes from one customer, factor churn risk into your valuation.

Articles of association, shareholder register, board minutes, and any existing shareholder agreements. Check for restrictions on transfer.

Key customer contracts, supplier agreements, leases, and employment contracts. Understand notice periods and change-of-control clauses.

Confirm ownership of trademarks, domain names, software, and trade secrets. Are they in the company's name — or the founder's personal name?

Request a declaration of pending or threatened litigation, regulatory violations, and tax disputes.

Non-binding offer outlining price, structure (asset vs share), exclusivity period, and conditions precedent.

Agree on price adjustments, earn-out clauses, seller guarantees, and transition support period (typically 3–6 months).

Draft or review the final Purchase Agreement (APA or SPA) with a qualified Danish corporate lawyer.

Execute the agreement, transfer funds, notify employees and key stakeholders, and begin the transition handover.