Pelonode Law Agency: M&A Due Diligence for SME Owners

SME transactions move at human speed. There is less bureaucracy than in enterprise deals—and more emotion. Pelonode Law Agency runs diligence to protect value while preserving momentum and goodwill. We focus on the essentials: what the business is, what assets you get, what liabilities tag along, and how to keep customers and staff on your side after closing. Our method is lightweight, disciplined, and built for decisions.

We begin with a one-page hypothesis memo: why this deal makes sense, where the value is, and what could break it. That memo informs the data room request list. We ask for documents in logical bundles—corporate, financial, commercial, people, IP and tech, compliance, and disputes. Each bundle has a short checklist and a named owner on both sides. We prefer clear scans, searchable PDFs, and brief summaries where history is complex. The value is not in volume but in traceability.

Financial validation is the spine. We do not redo the auditor’s work; we connect numbers to contracts and operations. Revenue quality gets special attention: Are top customers locked in? Any concentration risks? Any contingent or one-off items inflating EBITDA? We reconcile the general ledger with material contracts and test for revenue recognition consistency. If SaaS is involved, we check churn, cohorts, and backlog support. Numbers are a story; diligence makes it readable.

Commercial diligence looks at how money moves. We review key customer and supplier agreements for change-of-control clauses, exclusivity, MFN provisions, termination rights, and assignment mechanics. In the Baltics and EU, notice obligations and consent timelines can affect closing dates—so we map them early. If a contract is silent or ambiguous, we pressure-test: What is the operational reality? Who talks to whom and how often? Are there side emails that modify terms? We capture these findings in a risk matrix that links each risk to a remedy—price adjustment, condition precedent, or post-close covenant.

People drive continuity. We assess contracts, stock options, collective agreements if any, and policies. We identify critical employees, retention levers, and any misclassification or overtime risks. In an acqui-hire, IP assignment and non-competes matter; in product-heavy SMEs, shop rights and inventor assignments matter more. We advise on retention bonuses that are simple, time-bound, and tied to measurable outcomes, not vague aspirations.

IP and technology require clarity. We confirm ownership of code, patents, trademarks, and content. Open-source usage is mapped against licenses to avoid surprise obligations. For hosted products, we assess uptime history, SLAs, and incident playbooks. Escrow or transitional support may be required if key components are maintained by a small team. Where the seller used contractors, we verify assignment terms; stories about “friend of a friend” writing a critical module become deal issues if paperwork is absent.

Compliance is not an annex; it is part of operations. We check GDPR posture with a light-touch review: records of processing, DPAs, transfer mechanisms, and breach history. In regulated sectors, we list permits and approvals, renewal cycles, and any pending audits. For manufacturing or logistics, we look at safety and environmental obligations. The output is a concise map of what must be maintained from day one to avoid fines or service interruptions.

Disputes and liabilities are about probability, not fear. We review pending cases, letters before action, warranty claims, and historical incidents. Materiality thresholds keep us focused. We quantify likely outcomes and propose practical buffers—escrows, holdbacks, or warranty insurance where sensible. We do not litigate the past in diligence; we price it and contain it.

Integration planning begins during diligence. We note system overlaps, payroll timing, and vendor renegotiation opportunities. Communication plans to staff and customers are drafted alongside the SPA, not after signing. Closing checklists include ready-to-send notices, consent packages, and a day-one command center with responsibilities and phone numbers. Deals fail not because of clauses but because of chaos; we build structure.

For sellers, preparation is a gift to yourself. A tidy data room and clean corporate housekeeping can add real price and reduce friction. For buyers, clarity lowers risk and accelerates financing approvals. Pelonode Law Agency’s diligence is built for SMEs and their reality—fast, respectful, and laser-focused on what moves value. If you are contemplating an acquisition or exit, involve us early. We will help you see what matters and close with confidence.