Merging 2 Companies Checklist: AI, FinTech, HealthTech, and Others

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Vlad Zghurskyi

23.09.2025

15 Min Read

M&A is complex—miss a clause, liability, or tax detail and the deal shifts fast. A solid checklist keeps you covered and your economics intact.

Every M&A deal starts with this: the promise of scale, new markets, or a technology edge. But veterans know that all the initial excitement fades fast once the first due diligence process report lands on your desk.

Numbers rarely line up the way you expect.

Cultures clash.

Regulators complicate timelines.

Eventually, what looked like a “growth story” can turn into months of firefighting if you don’t have a system.

That’s why every dealmaker, no matter how experienced they are, should lean on checklists. You may know the merger process well, but complexity can multiply quickly. Miss a clause in the SPA, a pension liability, or the tax ramifications of the deal, and your economics change in a minute. Overlook information security or data privacy risks, and the value of the acquisition can erode before Day 1.

Ready to take a look at how to ensure a seamless merger process? Read on.

Merging 2 Companies At A Glance

Every deal may look unique, but the backbone remains the same. First, you chase the right opportunity. Then you put numbers on paper. Then comes diligence, structure, approvals, and closing. Finally, and this is where most “deal value” gets lost, you integrate.

The shorthand sequence:

Origination → spotting and qualifying targets, defining your objectives.
NDA/CIM → lock confidentiality, review seller materials (with plenty of red flags buried in footnotes).
Valuation & LOI → preliminary valuation of the merging companies, often more about negotiating leverage than actual economics.
Due Diligence → the truth serum stage. Everything from tax liabilities to cybersecurity holes gets surfaced here.
Structuring & Financing → Assets vs shares purchase, debt vs. equity mix, jurisdictional planning.
Regulatory/Antitrust → never underestimate how long this can drag, especially in multi-region plays. Antitrust laws and state regulators can impose extensive reviews, add compliance burdens, and even block deals outright.
Signing & Closing → mechanics of funds flow, escrow, final reps and warranties.
Post-Merger Integration → where synergies either become real or evaporate.

“Most executives spend 90% of their energy before closing, and only 10% on the integration process. But value capture is exactly the opposite. Deals fail not because the CIM was off, but because nobody planned how to blend employees, systems, and customers into a single company.”

— Taras Bachynskyy, Mergewave Capital Co-founder

If you take nothing else from this article, take this: integration is the deal.

Pre-Merger Preparation

The deals that implode usually don’t fall apart in due diligence. On the contrary, they fail because the preparation was sloppy. By the time you’re digging through data rooms, it’s too late to fix fundamental gaps in strategy or alignment.

Good acquirers know you have to do the hardest work before the first NDA is signed: bring legal and tax advisors, external advisors, and the right internal stakeholder owners early.

Define ownership and entitlements, review terms of use and code of conduct implications, and think about whether the transaction will create a completely new network or simply combine two companies’ infrastructures.

Define Goals That Actually Drive the Deal

“Growth” is not a strategy, but one of the vague, basic things every company keeps repeating. Before you look at a target, you have to know what success should look like 12, 24, 36 months after closing.

Are you buying customers, technology, or geographic reach? Maybe you’re after a margin improvement?

Deals without sharp goals tend to fall under the category of expensive distractions. Often, acquirers chase a competitor purely out of fear, only to spend two years trying to merge two mediocre businesses into… one bigger mediocre business. But if you have clarity at this stage, if you’re clearly defining your objectives, you’ll avoid that trap.

Get the Right Professionals In Early

It is tempting to think that your in-house counsel is enough. No, it isn’t.

You need a bench:

The earlier you bring them in, the fewer “deal breaker surprises” appear later. Yes, it’s expensive. But it’s cheaper than having to reprice the entire deal three weeks before signing.

Map Stakeholders

Too many buyers think in terms of ownership. Only (!) ownership.

But stakeholders stretch far beyond the cap table:

Boards and executive teams – their agendas can derail timing.
Employees – retention risk is often underestimated, especially in tech and professional services.
Customers – silence from you during a merger is an open door for competitors to take a step you won’t enjoy.
Suppliers and partners – contract change-of-control clauses can cause unexpected renegotiations.
Regulators – you want them informed, but you don’t need them to be surprised by the lack of communication from your part.

Successful deals run on relationship management as much as financial modeling. If you don’t know who can quietly block your progress, you’re not ready to close.

Run the Cost and Scenario Planning

Every deck you’ve ever seen shows “conservative, base, optimistic” models. But the actual truth is…worse: deals rarely land in the middle.

Hidden integration costs, cultural integration churn, IT migrations, tax exposures – they all eat into the shiny synergy number. If your deal only works in the best-case scenario, it’s a gamble, and you probably know it. It is definitely not a strategy.

Good acquirers run stress tests:

You don’t want to be discovering these answers in front of your board, right?

Mergers and Acquisition Process

Every M&A professional has their own “version” of the deal flow. Bankers make it look smooth and linear. Lawyers know it’s anything but. In reality, the process zigzags, stalls, and reopens at least twice before you close. Still, the backbone is consistent: sourcing, diligence, structure, sign, close, and integrate. Let’s take a look at the checklist for the merger and acquisition process.

Deal Sourcing, NDA & CIM

It starts with finding the right deal. Sounds obvious, but too many buyers let bankers flood them with targets that look fine on paper but don’t map to strategy. A disciplined acquirer filters early.

Once there’s a fit, the NDA is signed (your legal team will argue over boilerplate clauses, but don’t burn weeks here). Then comes the Confidential Information Memorandum.

Tip: CIMs are marketing documents. Assume revenue is smoothed, margins are “normalized,” and risks are buried in footnotes. Use it as a door-opener.

Initial Valuation & LOI

Here’s where you put a number on the table. Smart buyers avoid falling in love with a valuation model too early. It’s just directional until diligence is done.

“Letters of Intent or Indications of Interest serve two purposes: they set an anchor for negotiation and secure exclusivity. Both sides know the numbers will change. The point is momentum.”

— Pavlo Karapinka, Mergewave Capital Co-founder

Due Diligence

Diligence is a multi-front audit of the business. Done right, it protects you from disaster; done wrong, it can turn a winning deal into years of regret. The best teams approach diligence like project management: assign owners, set deadlines, and use a red-yellow-green (R/Y/G) status tracker.

Legal & Corporate Due Diligence

Legal diligence maps the skeleton of the company: who owns what, who controls what, and what obligations are lurking in the fine print.

You’re reviewing statutes and charters, ownership structures, and every shareholder agreement. If there’s a drag-along clause buried in a minority stake, you’d better know before signing. Material contracts (leases, distribution agreements, licensing deals) can hide consent requirements that stall or even block a transaction. And don’t underestimate pending litigation: one unresolved regulatory spat can flip a “clean” acquisition into a liability sinkhole.

Financial & Accounting Due Diligence

Finance diligence is less “is this company profitable?” and more “is profitability real, repeatable, and defensible?” Yes, you have to know your target’s financial position, but more about how it turns out in the long run.

You dig through three to five years of financials, stress-test cash flow, and run a Quality of Earnings analysis.

Numbers never lie, but they can mislead. Reported EBITDA often hides add-backs or one-time items. Working capital adjustments can swing valuations by millions if not properly normalized. Off-balance-sheet liabilities, like guarantees or vendor financing, often appear only when someone insists on pulling backup schedules.

Tax Due Diligence

Tax diligence, essentially, is about survivability. You’re checking that the company filed correctly, paid on time, and isn’t sitting on a ticking exposure. VAT/GST filings, transfer pricing documentation, and nexus rules in multiple jurisdictions are hotspots.

Cross-border deals raise the stakes: one overlooked permanent establishment can blow up the deal model post-closing. A proper M&A process checklist will push for scenario planning: What happens if a hidden liability surfaces? How much escrow is enough?

Tech Due Diligence

Tech diligence has moved from “optional” to “critical.” Investors now want to know: Will the IT backbone survive integration, or will Day 1 end in chaos?

This is more than a license count. It’s about scalability, cybersecurity resilience, and capex requirements. System inventories, API integrations, and Day-1/30/90 roadmaps need to be mapped. A legacy ERP that takes 18 months to integrate can quietly erase synergies.

And security: penetration tests, vulnerability scans, and architecture reviews now belong in the M&A security checklist. PE buyers and strategic acquirers alike know: a cyber incident within 90 days of closing will be blamed on sloppy diligence.

Security & Data Privacy

This is a diligence track in its own right. IAM/MFA protocols, encryption standards, disaster recovery plans must be assessed. In SaaS and fintech, regulators demand GDPR, CCPA, and industry compliance. Mapping sensitive data flows isn’t just a compliance exercise; it’s a valuation lever.

Why? Because buyers discount risk. A company that can prove airtight data handling is worth more than one that shrugs and says, “We think we’re compliant.”

HR & Compensation

People are the real assets. HR diligence identifies the organization’s backbone: the org chart, key managers, and talent retention risks. Change-of-control clauses in executive contracts can trigger unexpected payouts. ESOP or RSU plans can dilute ownership if not modeled.

The subtler part is culture fit. A brilliant acquisition with toxic integration dynamics is just a slow-motion failure. The M&A checklist template should explicitly cover retention strategies for critical talent. Losing your top engineers or salespeople post-close is value leakage, plain and simple.

Operations & Supply Chain

Finally, the machinery that keeps the business alive: operations and supply chain. Key vendors, logistics providers, SLAs must be vetted. A single-source supplier can become an Achilles heel if they’re acquired by a competitor or raise prices post-close.

Supply chain resilience is now an ESG and risk conversation, too. Buyers increasingly want to see diversification, digital visibility, and continuity plans.

What happens if your top vendor fails tomorrow?

Different sectors measure the value and risk of a target in very different ways. A one-size diligence sheet misses the nuances that matter to deal with economics. Below are the high-impact items you should add to your sectorized checklist.

Industry-Specific Metrics

Healthcare (provider, medtech, pharma)

Fintech / Payments

Defense / Government Contractors

How to use this in your M&A checklist template: create a short industry tab where the above metrics are prefilled as fields. During diligence, require the seller to populate each metric and attach supporting evidence (reports, certificates, third-party audits).

Structuring, Financing & Tax Planning

Structuring is the lever that changes effective purchase price, liability profile, and complexity of integration. Don’t treat it as an afterthought! A smart acquisition strategy is supposed to shape the deal so that financial, operational, and IT realities can support growth.

“The choice between an asset and a share purchase frames everything that follows – stamps, transfer consents, tax exposures, employee obligations, and the appetite of your acquiror financiers. Earn-outs and escrows bridge valuation gaps, but their drafting determines post-close grief or harmony. R&W insurance has become a standard tool to limit escrow size and resolve rep negotiation, but it has its own exclusions and tail rules (tax reps often excluded).”

— Taras Bachynskyy, Mergewave Capital Co-founder

Here are some considerations you should check:

Asset vs Share purchase: list practical consequences (contracts needing novation, VAT/GST on asset transfer, transfer taxes, employee transfer obligations). Put a table in the template mapping “asset” → immediate operational tasks, “share” → legacy liability review.
Earn-outs: define precise KPIs, measurement period, accounting definitions (cash vs accrual), true-up mechanisms, governance of disputed metrics, anti-manipulation covenants. Typical structure: 12–36 month performance window, with quarterly calculations and capped payout.
Escrow & Holdbacks: recommend ranges in the template (common market practice: 5–15% held for 12–24 months, depending on size/tax risk). Define claim procedures, caps (often a % of purchase price), and a waterfall for claim resolution.
R&W Insurance: include a checklist for whether R&W is suitable (PE deals, strategic with limited seller recourse). Capture: insured limit, retention (deductible), premium, known exceptions (fund claims, tax). Add a line to model the premium cost vs the reduced escrow.
Debt & Financing: capture required covenants, required leverage ratios, conditions precedent linked to drawdowns, and material adverse change covenants that may prevent lenders from funding.
Tax planning: mandatory checklist fields - transfer pricing, VAT/GST treatment on reorganizations, withholding tax on cross-border payments, use of local holding companies, utilization of tax losses, and exit tax risks. For cross-border deals, a tax opinion on permanent establishment exposure and treaty relief is required.

Throughout structuring, acquirers must conduct thorough diligence on data protection capabilities, gaps in security controls, and the level of cyber risk tied to existing IT systems and infrastructure.

Identifying these risks early reduces post-close integration challenges and allows the team to design a minimally disruptive transition plan. Without it, IT migrations and compliance upgrades often lead to robust change management headaches that drain synergy value.

Regulatory & Antitrust Clearance

This is where you face… bureaucracy. Regulators don’t care about your timeline. If it’s a cross-border transaction, expect multiple authorities to weigh in. EU Commission, FTC, CFIUS, local ministries.

Antitrust filings alone can stretch six months to a year. And regulators increasingly scrutinize deals for market concentration, data control, and national security concerns.

For deals touching critical tech or sensitive data, include a mandatory CFIUS (or equivalent) assessment and timeline. Prepare for mitigation agreements or mandatory FDI filings. Mergers can often go wrong without these.

Signing & Closing

Confirm all Conditions Precedent (CPs) mapping. regulatory approvals, third-party consents, financing commitments, board and shareholder approvals. Flag any CPs requiring time-sensitive actions (e.g., creditor consents).

Perform a funds-flow dry run – banks, escrow agent, wire instructions validated, tax clearance certificates requested, release mechanics agreed. Test the signatory authorities and execution pages.

Require a single closing call with a minute-by-minute rundown: final reps certificate, officer certificates, legal opinions, escrow agreement signed, payoff letters delivered, release of restrictive covenants. Use a closing binder that tracks every deliverable.

IP assignments filed, novations executed, benefit plan transfers initiated, customer/supplier communications deployed. Schedule the Day-1 integration playbook kickoff meeting.

Define who wires to whom, waterfall of payments (purchase price → payoff of indebtedness → escrow), timing of escrow releases and the dispute resolution mechanism for claims (arbitration vs courts), and indemnity survival periods. Ensure the template has a sample wire timeline and required bank contact points.

Draft the process for lodging claims (time windows, evidence required, escalation path), sample indemnity calculation example, and the relationship with any R&W insurance (e.g., insurer first, then escrow once retention exhausted).

Master Merger and Acquisition Checklist with Template

A successful m&a involves dozens of moving parts: legal and financial, tax, operational, regulatory, and post-closing integration. Without a structured framework, even experienced deal teams risk missing a critical step. Below is a checklist for a successful merger:

1. Pre-Deal Preparation

2. Due Diligence (Core Workstreams)

Legal & Corporate: ownership structures, charters, contracts, litigation exposure.
Financial & Accounting: historical financials, QoE, debt, working capital, forecasts.
Tax: audits, transfer pricing, VAT/GST, deferred liabilities.
Tech & IP: software stack, licenses, patents, OSS exposure, scalability.
Security & Data Privacy: GDPR/CCPA, IAM/SSO, encryption, breach history.
HR & Compensation: org chart, ESOP/RSU, key talent retention, compliance.
Operations & Supply Chain: vendor dependencies, logistics, SLAs, concentration risk.

3. Industry-Specific Metrics

Tailor your checklist to the sector. Examples:

4. Structuring, Financing & Tax Planning

5. Regulatory & Antitrust Clearances

6. Signing to Closing

7. Integration Planning (Parallel Track)

Post-Merger Integration

Most M&A approaches treat closing like the finish line. The merger happened, that’s it, right? In reality, it’s just the starting point. PMI is where value is created. Or it can be destroyed there.

“You can negotiate the perfect structure, pay the right price, and get through regulators cleanly, but if you fumble integration, you’ll never see the synergies you promised the board. That’s why smart acquirers plan PMI before the deal closes, especially when two or more companies are involved and must align systems, people, and processes.”

— Pavlo Karapinka, Mergewave Capital Co-founder

Strategic Planning

A comprehensive integration plan doesn’t happen by accident — it requires a roadmap. Successful PMI starts with a 90-100-day plan change management plan that sets priorities: organizational structure, and Day-1 essentials. It must also consider how company functions, such as HR, finance, and IT, will be combined without disrupting ongoing business affairs. Without this clarity, you risk losing both momentum and value.

Effective Communication

Employees, customers, and regulators all need to hear the right message at the right time. Establish clear communication channels (town halls, FAQs, integration updates) to reduce uncertainty. Silence creates rumors, and alignment comes from proactive messaging.

Alongside communication, leadership should review existing IT security policies and evaluate security policies and audit results to confirm that integration doesn’t open up vulnerabilities and won’t lead to loss of productivity.

Solve Problems

Every deal hits bumps: cultural clashes, IT glitches, unexpected liabilities. The key isn’t to avoid them (impossible), but to set up rapid problem-solving mechanisms: cross-functional integration teams, escalation paths, and KPIs to measure progress.

Buyer vs Seller Checklists

While a master merger and acquisition checklist covers the process broadly, buyers and sellers each have their own priorities in all types of mergers and acquisitions. Highlighting these differences prevents gaps and misalignment.

Buyer M&A Checklist:

Seller M&A Checklist:

International Deals

Cross-border M&A brings the same core challenges and a new layer of complexity. Teams must navigate geopolitical, cultural, and regulatory nuances. A successful outcome depends on how well management teams coordinate across borders, and whether there’s a solid plan in place for alignment before Day 1 of operations.

When two jurisdictions are involved, or even when two companies from different markets combine, the merged structure quickly becomes a combined company with overlapping systems, policies, and people. This creates pressure to streamline operations, avoid redundancy, and sequence integration activities correctly. Without a clear map of existing IT systems, global integration efforts often stall.

Common Risks

Even with the best M&A checklist, certain risks consistently derail deals:

Best practice: risk registers tracked weekly, with owners and mitigation steps, keep these issues visible before they explode.

Wrapping up

As we’ve outlined throughout this article, each stage of the M&A process plays a crucial role in ensuring a successful outcome. To wrap up, here’s a quick reminder of the checklist we discussed earlier — a practical guide to help you navigate transactions with clarity and confidence.

FAQ

What are the key stages of the M&A process (from origination to PMI) and typical timelines?

Origination, due diligence and valuation, structuring, signing/closing, and post-merger integration. Timelines range from 3–6 months for mid-size deals to 12–18 months for complex or cross-border ones.

What should a comprehensive M&A checklist include, and how do I use the downloadable template (owner/status/RAG)?

It should cover financial and legal areas, but also tax, HR, IT, and operational. Use the template to assign owners, track progress with status updates, and apply RAG for risk visibility. Depending on whether you’re after merger or acquisition, it will differ.

How do buyer and seller checklists differ across diligence, structuring, and closing?

Buyers focus on risk identification, valuation, and integration. Sellers emphasize preparing accurate data, managing disclosures, and ensuring deal certainty.

Which industry- and region-specific requirements (e.g., AML/KYC, HIPAA, ITAR/EAR, GDPR) should be added to the checklist?

Requirements depend on sector and geography—regulatory, data privacy, export controls, and compliance standards must be built into the checklist.

What common risks derail deals, and how can we mitigate them during diligence and Day-1/30/90 integration?

Frequent risks include hidden liabilities, regulatory delays, cultural misalignment, and missed synergies. Mitigation appears if you conduct thorough due diligence, add realistic planning, and structured Day-1/30/90 integration steps.

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