Tag: pre-acquisition risk factors

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All Things Investigations

All Things Investigations: Episode 15 – The Power of Pre-acquisition Due Diligence with Mike Huneke

 

Welcome to the Hughes Hubbard Anti-Corruption and Internal Investigations Practice Group’s Podcast, All Things Investigations. In this podcast, host Tom Fox and returning guest Mike Huneke of the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group highlights some of the key legal issues in white-collar investigations, locally and internationally.

 

 

Mike Huneke is a partner in the firm’s Washington office. Among other things, Mike advises clients on navigating and resolving multi-jurisdictional criminal or Multilateral Development Bank (MDB) anti-corruption investigations. He assists companies subject to post-resolution monitorships or other commitments and designs and executes risk-based strategies for due diligence on third parties.

Key areas we discuss in this podcast:

  • The commentary on mergers in the FCPA space is largely around post-acquisition.
  • The reason for pre-acquisition due diligence.
  • Questions a potential acquirer should ask before buying a business.
  • Even if they don’t have a program for some voluntary due diligence, sellers with nothing to hide shouldn’t be scared of buyers asking questions.
  • In advance of a sale, ensure you have clear records of tax considerations and that they are ready to be shared.
  • The basic mandates from the DOJ around post-closing.

 

Resources

Hughes Hubbard & Reed website 

Mike Huneke

Anti-Corruption Due Diligence Can Help Buyers, Sellers, and Their Advisers to Facilitate Acquisitions

 

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31 Days to More Effective Compliance Programs

Evaluating pre-acquisition risk factors

What you should do with the information that you obtain in your pre-acquisition compliance due diligence. Your approach should review key risk factors which should prompt a purchaser to conduct extra careful, heightened due diligence or even reconsider moving forward with an acquisition under extreme circumstances.
In the 2020 Update to the Evaluation of Corporate Compliance Programs, the DOJ stated “the extent to which a company subjects its acquisition targets to appropriate scrutiny is indicative of whether its compliance program is, as implemented, able to effectively enforce its internal controls and remediate misconduct at all levels of the organization. The following question was posed, Who conducted the risk review for the acquired/merged entities and how was it done? The bottom line is that you must use the information you have obtain in the due diligence process and have an auditable trail if the regulators come knocking.
Three key takeaways:

  1. Create a list of key risk factors in your protocol.
  2. Create a forced risk ranking, but remember it is simply that, a forced risk ranking.
  3. Your pre-acquisition team should include a suitable combination of legal, accounting, and compliance personnel.