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  • Writer's pictureDiana Steen

Before the Deal — The Art + Science of Pre-Transaction Due Diligence




Before the Deal


Due diligence is not a red light or a green light; it’s more of a cautionary signal that guides your path forward.



THE VALUE OF DUE DILIGENCE


Think of a due diligence investigation as a risk mitigation tool, one that provides greater insight and confidence when it comes to decision-making. Giving the go-ahead without a rigorous pre-transactional background investigation into the characters, qualities and histories of key individuals and the target company — even those you think you know well — is risky business. Protecting your investment and reputation calls for proactive measures that properly investigate potential business partners and acquisition targets. Here’s how we approach this challenge and some of the things we are on the lookout for:


+ Identifying potential areas of concern. This means criminal records, of course, but also if the subject has been sued often. Or is he litigious? Were there any serious contract disputes? Any untoward allegations against him? Have there been any domestic violence issues in his past?


+ Determining whether a subject is under financial stress — a known trigger for fraud or possible sign of financial mismanagement.


+ Focusing on issues of potential concern related to someone’s professional track record, such as the omission of facts, gaps of time with no supporting details, frequent job hopping, false representations, misleading statements or if the subject left a previous employer under bad terms.




INSIGHT. CONFIDENCE. ASSURANCE.


Whatever your role, we provide the information you need.


FOR THE DEAL TEAM:


+ Insight into the validity of the subject’s stated credentials

+ Satisfaction that prospective business partners or acquisition targets (and their management teams) are properly vetted

+ Significantly lower levels of risk associated with fraud, embezzlement and theft —and less chance of surprises down the road



FOR LEADERSHIP:


+ Confidence that risks to the organization are actively and continuously managed

+ Certainty that every investigation is conducted and quality-reviewed with accuracy, diligence and care



FOR LEGAL COUNSEL:


+ Confidence that all information collected is lawfully acquired specialized violence risk education training, the forensic psychologist identifies a subject’s level of violence risk potential — a key factor in determining proper next steps




TRUST. TRUST. TRUST.


When you’re dealing in highly confidential business transactions, trust is not an ideal, it’s an imperative.


Before you engage the support of an outside team, you need to do your own research on the investigative professionals taking on this vitally important role.


+ Document the firm’s depth of experience, strict code of ethics and extensive client references

+ Confirm that all collected and shared electronic files are protected by a high level of information security policies and systems

+ Verify that findings are collected with discretion, investigative diligence and professional respect for your firm and the privacy, interests and relationships of a subject or subject company

+ Ensure that critical facts are objectively determined, accurately reported, legally acquired, compliant with all relevant regulations and comprehensive in scope

+ Request that every due diligence report is presented as a confidential and privileged work document prepared for use by your firm and counsel




OUR APPROACH IS BUILT AROUND THE FIVE KEY STEPS THAT START WITH YOU


1. Listen


We begin with a one-on-one exchange to learn about you, your business, your needs and specific challenges to get a clear vision of the strategic path ahead.


Our investigative team also is available to discuss with you background information about the deal and those involved as well as any specific or known issues of concern, timing considerations and special circumstances.



2. Identify


We research the subject and/or subject company to identify essential personal and professional data. We conduct court and public records searches in relevant jurisdictions — whether in the U.S. or abroad — to gain valuable insight into the subject’s personal history, lifestyle and issues of concern.


We also try to verify —or find undisclosed or conflicting details — about the subject’s education, employment history, professional licenses and other information found in places such as professional bios, press reports, corporate filings and SEC filings.


Press and social media searches help add dimension to this insight and often fill gaps not found in records alone. When necessary, we conduct person-to-person interviews to provide additional information about the subject.



3. Analyze


Here’s where we connect the dots. We carefully review and make sense of disparate pieces of information we have uncovered to provide you with important insight. Our approach is to carefully consider every discovery and, more importantly, identify its significance within the big picture.



4. Review


Your final report goes through a rigorous peer review process. Every case is overseen by a senior member of our investigations team.



5. Report


Our investigative expertise, finely tuned processes and value-added analysis culminate in a clear, concise and engaging due diligence report that documents critical facts wrapped in in-depth analysis to bring a deeper understanding of the subjects of interest.

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