If not, you may end up paying much more than you negotiated for.
M&A deals require a significant investment of time and capital. Don’t risk it all on hidden or undisclosed risks. M&A due diligence aimed at establishing the facts and data necessary to make the best investment decision often fails to account for significant risks tied to a company’s personnel and past business practices. Before you initiate the more in-depth financial and operational due diligence processes, you should consider closely examining key elements of the deal. Avoiding hidden risks requires conducting enhanced due diligence on a target company’s:
To verify that your investment opportunity does not come with unexpected baggage, you need to implement a process that includes going beyond the confines of financial and legal due diligence. Infortal Worldwide has established a proprietary approach to due diligence investigations over 30 years of providing risk-based solutions. To learn more, please download the Due Diligence Guide for Investors.
It all starts with an initial consultation with the Infortal Worldwide team of experts.
Based on the scale and scope of the deal, Infortal will partner with your deal team to establish a due diligence investigation roadmap that will yield the required information to move forward confidently and protect your investment.
We then employ cutting-edge, industry-leading investigative techniques to ensure that we pull in accurate and definitive intelligence. This includes examining proprietary deep, dark, and historical web resources. We also employ full open-source intelligence (OSINT) investigation capabilities.
Once the investigation begins, communication is fundamental. We provide updates regarding key information throughout the investigation's lifecycle.
To assess potential risk exposure in M&A deals, we examine a wide range of sources focusing on:
Infortal Worldwide provides your legal, finance, and accounting teams with key intelligence to evaluate deals more effectively and determine whether further assessment, restructuring, or renegotiation of deal terms is necessary.
Conducting enhanced due diligence on the executive team of a company is necessary to uncover hidden risks and establish a true valuation. This involves going beyond cursory background checks.
Imagine discovering that your acquisition target failed to disclose that their CIO was recently arrested on drug charges or that their COO was just named in litigation involving their previous employer. These are very real scenarios.
While most companies conduct legal and financial due diligence, they often fail to conduct due diligence on the people behind the target company. Yet, people often represent the greatest risks to the long-term success of a deal.
Our process, developed over 30+ years of conducting investigations and interviews of top executives, ensures that you gain a true understanding of who you are doing business with.
Do you know who is behind the company you are acquiring? How about their track record?
Not being able to answer these key questions can bring significant risk to your deal. It’s vital that you know exactly who sits across the negotiation table.
Federal regulators have increased their focus on examining the beneficial ownership of companies in the US. The Financial Crimes Enforcement Network (FinCEN) has explained that this is based on “the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.”
You do not want the federal government to be the first to uncover a hidden connection to bad actors that may now implicate your firm.
If you invest in a company only to find out later that it’s embattled in lawsuits or government inquiries, you may spend millions more on your M&A deal than you expected.
Our investigative process provides you with the information required to locate and assess any past business practices or litigation exposure that can create real future problems. This includes examining the company’s risk exposure along with key executives.
Reputational risks may be hiding just under the surface.
In today’s interconnected world, information travels at a lightning pace. A single Instagram post can destroy company value in seconds.
Unpacking reputation risk requires expertise and a deep level of intelligence. Term sheets and marketing materials rarely provide a true gauge of reputation. Instead, you need to dive deeper to uncover intelligence related to a company’s leadership team and track record to understand if there are any undisclosed risks that can ultimately impact your hard-earned reputation.
You do not want to invest thousands into the due diligence process before discovering that your target acquisition is a reputational risk nightmare.
If you are considering international investment, we’ve got you covered.
So ask yourself… Do you fully understand the potential geopolitical and economic risks that can impact your deal valuation? Do you have a plan to navigate these risks when they inevitably occur?
If the answer is no, we can help.
Infortal Worldwide provides Geopolitical Risk assessment and due diligence services that can support your international M&A due diligence process. This includes gaining a deeper understanding of international market conditions and how to negotiate your deal overseas.
For more information, please check out the Infortal Worldwide Geopolitical Risk Guide and Geopolitical Risk Checklist.
Why not head to the negotiation table with an edge?
Aside from avoiding risk, our due diligence investigations provide you with a deeper understanding of who is sitting across the negotiation table.
This can be instrumental in negotiating the best price and structuring the deal in a way that places you in the strongest position to succeed.
M&A Due Diligence Investigations can also help sellers avoid problems with potential buyers before and after the acquisition.
As securing financing has become more difficult and earn-outs more common, sellers must carefully consider who is buying their company and how they plan to fund their purchase.
Our due diligence investigation process can provide greater insight into the strength of potential buyers. This may be important in protecting your former employees and professional legacy.
Our due diligence investigations help you understand fraud, bribery and corruption issues so your organization can avoid unnecessary risk exposures.
Protecting your corporation’s Board of Directors, shareholders and employees are part of key risk mitigation strategy.
Infortal has screened workforces for Fortune 100 companies, banks, law firms for 30 years including nationwide and international hires.
