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Finalizing and approving an M&A business case is a critical step before entering the due diligence phase. At this stage, it is essential to thoroughly evaluate various aspects of the potential acquisition to ensure that the rationale is sound, risks are manageable, and synergies are achievable. Given the description and the available data, here are 20 questions that should be asked during the execution of this task:

 Acquisition Rationale and Strategic Fit

1. What is the strategic rationale for acquiring the target company?

How does the acquisition align with the company’s overall strategy and growth objectives?

2. What specific synergies are anticipated from the acquisition?

Are there revenue synergies, cost synergies, or both? How will they be achieved?

3. How does the acquisition complement or enhance our existing portfolio of products, services, or capabilities?

Does the target bring new technology, intellectual property, or customer segments?

4. What are the key differentiators and competitive advantages that the target company offers?

Are these advantages sustainable in the long term?

 Financial Model and Valuation

5. What are the key assumptions in the financial model for NewCo (the combined entity)?

Are the assumptions around growth rates, margins, and cost synergies realistic and defensible?

6. How does the valuation of the target company compare with market comparables?

Are there alternative valuations such as DCF (Discounted Cash Flow), market multiples, or precedent transactions used?

7. What is the impact of the acquisition on our financial statements (e.g., EPS, cash flow, debt levels)?

Will the acquisition be accretive or dilutive in the short and long term?

8. What is the proposed budget for integration, and how does it compare to the expected benefits?

Are there adequate provisions for integration costs and contingencies?

 Deal Risks and Deal Breakers

9. What are the key risks associated with this acquisition, and how are they mitigated?

Are there regulatory, operational, financial, or cultural risks that could threaten the deal?

10. What are the identified deal breakers, and how likely are they to occur?

Are there any significant obstacles that could prevent the deal from closing?

11. What are the potential adverse scenarios, and what is the contingency plan if they occur?

Is there a plan for unexpected outcomes, such as economic downturns or competitive responses?

12. What is the impact of potential deal risks on the overall valuation and expected return on investment (ROI)?

How sensitive is the valuation to key risk factors?

 Integration Strategy and Planning

13. What is the proposed integration model, and how will it be executed?

Is it a full integration, partial integration, or standalone model? What are the integration steps?

14. What is the timeline and speed of integration, and how realistic is it?

What are the critical milestones, and how will progress be monitored?

15. What are the key integration challenges, and how will they be managed?

Are there any cultural, system, or process integration issues anticipated?

16. Who are the key stakeholders in the integration process, and what are their roles and responsibilities?

Has an integration team been identified, and are resources allocated appropriately?

17. What is the impact of the acquisition on our current operations and existing projects?

Will there be disruptions or a need for reallocation of resources?

 Stakeholder Alignment and Governance

18. Do all key stakeholders agree on the strategic rationale, financial assumptions, and integration plan?

Is there alignment among the board, senior management, and key departments?

19. How will success be measured post-acquisition, and what are the key performance indicators (KPIs)?

Are there clear criteria for evaluating the success of the acquisition over time?

20. What is the approval process for the business case, and who has the final decision-making authority?

What are the next steps if the business case is approved or rejected?

These questions ensure a comprehensive evaluation of the M&A business case before moving into the due diligence phase, helping to uncover potential risks, validate assumptions, align stakeholders, and ultimately make a well-informed decision.

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