Mastering the Initial Request List (IRL) in M&A Due Diligence: A Buyer's Guide
Navigating the crucial first steps of M&A due diligence? Our comprehensive guide to crafting an effective Initial Request List (IRL) ensures you start strong. Learn how to strategically compile and prioritize document requests, covering key areas such as financial records, contracts, intellectual property, and regulatory compliance. Discover techniques to tailor your IRL for different industries and deal structures, maximizing efficiency and uncovering critical information. Essential reading for M&A lawyers, corporate development teams, and due diligence professionals representing buyers. Optimize your acquisition strategy, streamline the due diligence process, and identify potential deal-breakers early with our expert insights on IRL preparation.
When representing the buyer in an acquisition, one of the key initial steps for the law firm is to prepare the initial request list (IRL) of documents that should be requested from the seller. Here is how you might approach preparing the IRL:
Understand the transaction type and the target company or asset: gather information about the proposed transaction, the target company's business, industry, and any specific areas of concern or risk that need to be evaluated.
Consult with the client and other advisors: consult with the buyer's internal team, financial advisors, and other professionals involved in the transaction to understand their specific areas of interest and any particular concerns they may have.
Develop a comprehensive document request list: develop a comprehensive list of documents and information to request from the seller. This IRL typically requests:
Corporate records (e.g., articles of incorporation, bylaws, minutes, resolutions)
Material contracts and agreements (e.g., customer contracts, supplier agreements, leases)
Intellectual property records (e.g., patents, trademarks, copyrights)
Employment and labor records (e.g., employment agreements, employee handbooks, benefit plans)
Regulatory and compliance records (e.g., permits, licenses, environmental reports)
Litigation and dispute records (e.g., pending lawsuits, settlements, correspondence)
Real estate and property records (e.g., deeds, title reports, environmental assessments)
Organize and prioritize the request list: organize the IRL in a structured manner, often categorizing requests by subject matter or importance.
Collaborate with the seller's representatives: work with the seller's legal counsel or representatives to understand the best way to provide the requested information and to address any potential confidentiality or logistical concerns.
Confirmation from buyer: confirm with your client (the Buyer) that there is nothing missing from the IRL.
Finalize and submit the IRL: Once the document request list is finalized, formally submit the IRL to the seller's representatives, often through a secure virtual data room or other agreed-upon method.
