Series 79 practice questionmediumOperational due diligence – employee retention risk
Which of the following findings during operational due diligence would MOST likely impact the buyer’s integration strategy post-acquisition?
- AThe company uses a different accounting software
- BA significant portion of the target’s workforce is eligible for retirement within one year✓ Correct answer
- CThere are multiple bank accounts
- DThe company operates in several time zones
Explanation
Why B — A significant portion of the target’s workforce is eligible for retirement within one year
Imminent employee retirements can lead to a significant loss of institutional knowledge and disrupt operations, impacting integration. Different software and bank accounts are logistical, while multiple time zones is a standard business issue.
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