A desaturated, high-contrast photograph of still water, a mountain ridgeline, graded to the brand's forest and stone tones.

Arkon GroupModule perspective

Commercial due diligence: test the deal you are actually doing, through the customers who decide it

A commercial diligence earns its fee when it names the type of deal, sets what the first year must show, and tests the one customer behaviour that could undo it.

Arkon Group perspective · updated 10 October 2026

Most commercial diligence describes the target: its market, its share, its growth. That is necessary but rarely decisive. Arkon's view is that the outcome of an acquisition is settled by customers: the target's customers, your customers, and how each group behaves once ownership changes. A useful diligence starts by asking why you are buying. It then states what success looks like within a year and tests the specific customer behaviour that could stop it. The logic holds whether the target makes engineered equipment, delivers managed services or sells software.

Framework

Name the deal first, because each type succeeds or fails on different evidence

Acquisitions in B2B fall into four commercial types. Each has its own definition of success, and a diligence that blurs them tests the wrong things.

  • Buy your way into a new market: you acquire customers you could not reach, and plan to sell them your offer.
  • Buy what your customers buy elsewhere: you add a line your existing customers already purchase from someone else.
  • Buy a competitor: you combine two businesses serving overlapping customers and take out duplicated cost.
  • Buy a supplier or a route to market: you own a link in your chain to cut lead times and coordination cost.

Framework

Good looks like a first-year result you can write down before you sign

Each deal type has a visible test within a year. Agreeing it up front gives the diligence a target to examine and gives the board a measure to hold the integration to.

  • New market: your offer is selling to the acquired company's customers, and its margin is moving towards yours.
  • Adjacent line: your customers are buying the new line, and lines per customer are rising.
  • Competitor: overheads are joined, prices to shared customers are holding, and customers are kept.
  • Supplier or route to market: lead times and coordination costs with the company are falling, and its sales to others are kept.

So what

Each deal type has one customer risk that can decide it, so the diligence should test it directly

Behind every deal type sits one customer behaviour that market data will not show. It only becomes visible by examining how customers actually buy. This is where diligence effort should go first.

  • New market: if the target's customers buy because of their relationship with its owner, the owner's transition decides the deal.
  • Adjacent line: if your customers buy the line under a framework agreement with another supplier, the switch waits for that agreement to renew.
  • Competitor: if the competitor's customers dual-source to keep two suppliers, some will move away once the two become one.
  • Supplier or route to market: if its other customers are your competitors, they leave once you own it.

So what

The same questions apply across industrial, services and software targets; only the evidence changes

Arkon holds this view consistently across catalogue and engineered-to-order equipment, components, process materials, consulting, managed services, staffing, technology-enabled services, and horizontal, vertical, licensed and usage-based software. The deal logic does not change. What changes is where you look for proof.

  • In equipment and components, check framework and approved-supplier arrangements, and whether buyers deliberately keep a second source.
  • In consulting, staffing and managed services, check how much of the book follows the owner or a few partners.
  • In software, check whether the line you want to add is locked into another vendor's contract, and when that contract renews.
  • In any supplier or channel deal, list who else it serves before assuming that revenue stays.

How Arkon helps

Get a diligence built around the question that decides your deal

Arkon's Due Diligence module is delivered once, for a specific target. It establishes which of the four deal types you are pursuing and sets out what good should look like within a year. It then tests the customer behaviour most likely to stand in the way, whether that is owner-held relationships, framework renewals, dual-sourcing or competitors among the target's customers. You get a commercial case your board can act on, and first-year measures your integration team can be held to.