Operational Diligence
To ensure the success of any transaction—whether on the buy-side or sell-side—it is critical to assess whether the target’s operations are structured to support its business objectives.
Our Operational Due Diligence (“ODD”) specialists bring deep experience in both qualitative and quantitative evaluations of operational performance, identifying key risks, opportunities, and red flags that could affect deal value or execution.
We help clients anticipate and mitigate operational challenges that may arise during a transaction, including:
- Failure to realize projected deal value
- Underestimated cost-to-achieve or unexpected capital and resource needs
- Missed synergy targets or delays in activating revenue and cost levers
- Incomplete or misaligned Transitional Service Agreements (TSAs) and Purchase Agreements (PAs)
- Challenges in supporting valuation and investment rationale
Our ODD offerings are tailored to the specific context of each transaction—buy-side or sell-side.
Buy-Side ODD Services
Whether acquiring an entire company (WholeCo) or a carve-out entity, our buy-side ODD helps buyers validate value and plan for integration or standalone operation:
- Red Flag Assessment – A high-level review of critical operational risks and opportunities to support go/no-go decision-making
- Synergies Assessment – Identification and prioritization of revenue and cost synergies by value, complexity, and timeline to support strategic alignment
- Integration Readiness – Analysis of the target’s operating model, maturity, and compatibility with the buyer, including risks from changes in control (e.g., licensing, regulatory, or legal impacts)
- Stand-Alone Cost Assessment – Evaluation of one-time and recurring costs necessary to operate the business independently post-acquisition
- TSA Review – Assessment of transition support needs, timelines, and cost structures to ensure continuity for the carved-out entity
- PA Review & Support – Assistance with purchase agreement negotiation, valuation modeling, and deal readiness preparation
Sell-Side ODD Services
For companies preparing for divestment, our sell-side ODD supports carve-out and WholeCo readiness strategies that protect and enhance deal value:
- Divestment Strategy Assessment – Validation of strategic rationale and deal perimeter to optimize transaction value while minimizing one-time separation costs
- Separation Readiness – Review of key operational components, potential disentanglement risks, and separation strategies for clean execution
- TSA Design & Pricing – Development of well-structured transition service agreements, including cost modeling for services to be provided post-close
- Stand-Alone Cost Assessment – Identification of operational costs for the carved-out business to function independently
- Stranded Cost Assessment – Analysis of residual costs left with the seller (e.g., unused headcount or IT licenses) that may impact ongoing cost structures
- Sale Agreement Review & Support – Guidance on agreement terms, valuation alignment, negotiation strategy, and transaction preparation