Mergers and Acquisitions Due Diligence | Mercer

Mergers and Acquisitions

M&A Due Diligence

Human Capital Due Diligence, A Blueprint for Success

In merger and acquisition transactions, human capital due diligence plays a critical role in ensuring thae transaction will achieve the expected financial benefit. It encompasses a detailed review of the talent and benefits structure and ensures appropriate risk management and effective post-merger governance.

In a seller’s market, transactions are fast-paced; deals are closed with less information than is ideal, and the risks are high. In a buyer’s market, risk is weighed more carefully. Private equity and strategic buyers have significantly different requirements around due diligence. A financial buyer’s interest may be limited to only those risks that impact valuation, whereas corporate (strategic) buyers need to consider factors that have long-term implications.

Due Diligence and Deal Flow

Providing due diligence for this dynamic marketplace requires real-world, practical, and tactical experience. At Mercer, we’ve developed a comprehensive road map to guide clients through the human capital due diligence process. We’ve set up frameworks that help clients recognize risks and examine potential financial, fiscal, legal, operational, and administrative pitfalls with respect to people issues. 

Our expertise allows us to identify human capital risks, including management team and key employee compensation, pension risks, high employee turnover, difficult labor relations, and local regulations.

Reverse Due Diligence

A seller’s view of a transaction differs significantly from a buyer’s. Sellers need to take a level, objective view of the proposed divestiture process to identify issues and red flags correctly.  Mercer helps sellers identify ring fences and risk, and quantify liabilities so they can proactively mitigate or reverse issues to maximize monetization upon exit.

Global Resources and Compressed Timeframes

Mercer’s global footprint means we can have due diligence experts on-site in as little as 24 hours.

Having experts who speak the language of the organization and know the local laws is a distinct advantage. It allows us to perform due diligence quickly and more accurately, which is vital during a seller’s market.

Real-World Intelligence

Mercer provides hard-nosed, timely and in-depth information to buyers and sellers for both private equity firms and corporations. Our team has firsthand, hard-won experience across the full spectrum of HR disciplines and the ability to perform due diligence on everything that hits a firm’s balance sheet related to human capital.

Click here to listen to Mercer`s M&A Readiness Podcast Series and get a deeper, holistic view of strategic planning, meaningful analysis, risks mitigation and effective solutions.

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