Pre-emptive Due Diligence
Why don’t companies have due diligence imprinted on their business process? Due diligence is essential for reducing and mitigating the legal, financial and commercial risks associated with business transactions and other. Especially as there are people who wish to take advantage of – or corrupt – business transactions.
What is pre-emptive due diligence?
Due diligence is the investigative process that identifies, verifies and confirms the claims of another party. This can be done before or after a business transaction, for instance, the merging or acquiring of a new business. Pre-emptive due diligence refers to the practice of conducting this investigation prior to undertaking any business transaction.
Pre-emptive due diligence is all about risk reduction. Our qualified due diligence specialists help businesses to understand the possible risks and rewards of any pending business transaction. This will allow company leaders or individuals to prepare for and mitigate potential risks, as well as make well-informed business decisions.
Why is pre-emptive due diligence essential?
The importance of due diligence cannot be stated enough. Failure to perform proper due diligence could result in severe financial and commercial damage. For example, Hewlett-Packard suffered huge losses after their failure to conduct thorough due diligence on acquired company Autonomy. It was only a year after the 2011 acquisition that they discovered accounting irregularities and accused Autonomy’s executives of artificially inflating the company’s value to attract investors.
Such occurrences are not unheard of and make the process of due diligence even more essential. Pre-emptive due diligence protects the buyer and uncovers potential unforeseen liabilities.
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What’s involved in our pre-emptive due diligence process?
Using state-of-the-art IT and computing systems, we examine publicly available information including online and media resources and social media records (as well as “deep web”/ non- public access) to disclose all information essential for the assessment of business practices. This applies to publicly available information from foreign nations too.
Local source enquiries include discreetly gathered information about the reputation of subjects from sources who possess in-depth knowledge. Using public source material as well, Blackhawk’s pre-emptive due diligence team conduct discreet inquiries to establish any possible PEP (politically exposed persons) red flags. PEP refers to an individual who may be vulnerable to corruption, often extending to family members and close associates.
Local source enquiries include discreetly gathered information about the reputation of subjects from sources who possess in depth knowledge. Using public source material as well, Blackhawk conducts discreet inquiries to establish any possible PEP red flags.
Compliance investigations ensure that the subject company or individual falls clearly within all statutory or regulatory guidelines and constraints such as the Foreign Corrupt Practices Act (FCPA) in the USA, the General Data Protection Act (GDPR) in the EU and all UK anti-bribery laws.
Investigation of possible improprieties may indicate cases of fraud by directors or other senior executives which would be detrimental to the client.
In our detailed reports, we clearly state the information sources for verification purposes. Our reports are backed up by recorded or photographic evidence following on-site visits. Reports are often prepared in a format that is CPR (civil procedure rules) compliant for Court presentation purposes.
Who benefits from pre-emptive due diligence?
There are many benefits of undertaking proper due diligence and these tend to be reaped by parties looking to ensure their business security.
- In an M&A transaction, the buyer will benefit from access to confidential information about the seller. This will allow for proper review and evaluation of associated risks and value.
- A company which spans multiple countries and legal jurisdictions will benefit from the commercial clarity of pre-emptive due diligence. It will allow a company to access information on potential or existing foreign partnerships. This will allow for well-informed decisions concerning international business dealings.
Contact Blackhawk Intelligence for pre-emptive due diligence support
Our goal is to seek out every bit of information relevant to any transaction – making sure that finance directors are in the best place possible to make decisions that are in their business’ best interests.
Thanks to our network of human resources around the globe, our due diligence services are not restricted to just the UK. Our reliable international resources provide us with local knowledge to help businesses better understand their potential partners on the international stage.
For more information, talk to our team by calling +44 (0)20 8108 9317 today. Alternatively, you can contact us via the Contact Form.