Due Diligence

Dedicated to
the Details

Effectively executing due diligence during mergers and acquisitions involves careful consideration of numerous complex factors, paired with extensive attention to detail. All aspects of the transition, from regulatory and legal compliance issues to interpersonal factors that affect the employees themselves, must be taken into account and dealt with appropriately.

Form of Acquisition

The implications of whether the acquisition is an asset or stock purchase are critical in determining an effective transition plan. Understanding how employees and current business operations are to be transferred will dictate the options available and the timetable for the transition. Having existing legal structures and employment setup makes it easier to transition in most countries. If you need to set up legal entities, transition employment to a PEO, or set up payroll and benefits, Global Upside can assist with a complete solution in an expedited manner.

HR, Benefits, and Payroll Due Diligence

Understanding employees’ current employment status, employment law implications, and regulatory requirements is imperative to transitioning the employees successfully. International employment law varies from country to country, with considerations for aspects including the EU’s acquired rights directive, collective bargaining agreements, works councils, and unions. Ensuring you understand the employee’s current terms and conditions of employment and formulate a plan to transition their employment is imperative. Global Upside can perform such due diligence and ensure all labor law and statutory requirements are met.

Standing up employees for payroll and benefits immediately upon completion of the acquisition is also critical. Global Upside can perform the due diligence to ensure the payroll systems, payroll taxes, and statutory benefits and supplemental benefits are in place. Our team verifies that comparable or equivalent terms and conditions of employment are met, the employees’ experience a smooth transition, and the client receives the necessary ongoing support.

Gathering all the historic human resources, payroll, and benefits information you will need to support the business is essential. Employment contracts, personnel records, prior employer(s)’ policies, procedures, and processes, and payroll records are all needed to support the ongoing business. Global Upside can assist in obtaining and organizing this information and make it in formats useful to your business.

Accounting, Tax, and Compliance Due Diligence

Ensuring business operations have the back-office systems and support they need to ensure a seamless transition is essential. Gaining an understanding of the current ERP and administrative systems in place, the resources supporting them, and planning how to put the equivalent support in place is paramount. Global Upside can provide the resources to support existing systems in the transition, or assist in standing up new systems to be operational immediately upon acquisition.

Obtaining all tax and compliance documentation to ensure legal and tax entities have been kept in good standing is imperative. Whether it is income tax returns, indirect tax returns, or local company law compliance requirements, Global Upside can assist in the information gathering and evaluation of the entity’s current status and requirements. Subsequently, we can put together the tax and compliance calendars, and assist with the preparation and filings of all the income tax, indirect tax, and company law compliance requirements.

Employee Experience

With both types of purchases, a very important factor to consider with regards to HR is employee experience. When you acquire a company, it is often a disturbing time for the employees. Process and workflow changes, uncertainty surrounding their futures, concerns about new management, and company culture differences may all have an effect on them. As a result, clear communication with the employees is key prior to, during, and following the acquisition. The purchasing company should provide transparency and clarity into what the transition would mean for the employees and how it will affect them. Human capital is a company’s most valuable asset, so retaining employees who are adequately adjusted and prepared Day 1 is crucial.