Investment Due Diligence
Effective due diligence is a key component of a successful business transaction. Whether acquiring a company, investing in a business, or considering a partner, understanding the risks and developing ways to mitigate them in advance increases the chance of a successful deal. The practitioners at K2 Integrity pioneered the reputational due diligence field by developing the tools and expertise to provide clients with actionable information to shape business decisions.
As part of the diligence process, clients must evaluate not only the upside but what might go wrong. To this end, K2 Integrity looks to past practices, behavior and events to understand what the future might hold. While every matter presents different fact patterns and issues, most due-diligence investigations seek to answer a series a questions designed to inform a client’s decision. They typically include:
- Is the company or its management facing undisclosed financial, legal, or regulatory challenges?
- Can the claims made by the business be independently verified?
- Does the company have undisclosed investors, business partners, or related party transactions?
- Has the company engaged in problematic behavior in the past that is likely to be repeated?
- Are there indications of corporate mismanagement or failure to institute adequate internal controls, compliance programs, or reporting mechanisms?
- Have members of the company’s leadership team been connected to scandals or controversies and do they have the requisite ability to lead the company?
- How is the company and its leadership regarded by customers, competitors, and former employees?
To answer these and other questions, investigations are led by senior practitioners across the world, who use iterative and collaborative investigative methodologies that rely on the team’s extensive and diverse experience, thoughtful application of technology, and a deep use of local insight to develop facts that allow clients mitigate risks. Our consultative approach allows clients to match the level of diligence with the level of opportunity risk, so that our work ranges from targeted compliance screens to identify prominent red flags to complex multi-jurisdictional investigations across countries and continents.
While some due diligence investigations begin with a broad search of information developed in the public domain, others might begin with a careful analysis of discrete information or might require extensive industry insight to shape appropriate methodologies. Regardless, all due diligence investigations are conducted in utmost confidence and to the highest legal and ethical standards.
The facts in these investigations allow our clients to proceed with confidence or restructure transactions as necessary in order to safeguard both their investments and reputations.