Mergers & Acquisitions (M&A) Due Diligence
While mergers and acquisitions provide significant business opportunities for organizations, they also come with potential risks, many times consequential. This includes the risk of successor liability for the acquiring company. M&A can bring the good an entity developed in its business operations, but also the bad, if that entity has a history of corruption and other misconduct that could place the acquirer in the crosshairs of law enforcement. Non-existent or lacking pre-acquisition due diligence can allow that wrongdoing to continue with the potential of financial, litigation and reputational risk for the acquirer. A robust vetting process for M&A can discover information that may determine whether the deal is finalized.
Government pronouncements also reinforce the importance of knowing your acquisitions. The Department of Justice’s Evaluation of Corporate Compliance Programs, updated March 2023, opines on the importance of M&A due diligence. The government guidance states that “A well-designed compliance program should include comprehensive due diligence of any acquisition targets, as well as a process for timely and orderly integration of the acquired entity into existing compliance program structures and internal controls.”
SunHawk Consulting’s professionals have extensive experience conducting thorough pre- and post-acquisition due diligence for clients. Our global resources and research expertise can separate fact from fiction, providing the client with a sound understanding of the potential risks to M&A deals. SunHawk’s in-depth inquiries have resulted in:
- Identification of risks where negotiations were ended,
- Deals were modified to remediate the risk,
- Enhanced internal controls were instituted, and
- Other resolutions favorable to our clients were achieved.
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