Pre-acquisition due diligence, however, is usually only a portion of the compliance process for mergers and acquisitions. DOJ and SEC evaluate whether the acquiring company promptly incorporated the acquired company into all of its internal controls, including its compliance program. Companies should consider training new employees, reevaluating third parties under company standards, and, where appropriate, conducting audits on new business See more +

Pre-acquisition due diligence, however, is usually only a portion of the compliance process for mergers and acquisitions. DOJ and SEC evaluate whether the acquiring company promptly incorporated the acquired company into all of its internal controls, including its compliance program. Companies should consider training new employees, reevaluating third parties under company standards, and, where appropriate, conducting audits on new business units.

The earlier you can deploy these steps, the better off your company will be at the end of the day. An acquisition that fails for compliance reasons is a preventable disaster of the first order. One need only consider the Latin Node Inc. FCPA enforcement actions where the acquiring company had to write off its entire investment because it had wholly failed to engage in appropriate pre-acquisition due diligence.

Three key takeaways:

1. Planning is critical in the post-acquisition phase.

2. Build upon what you learned in pre-acquisition due diligence.

3. You need to be ready to hit the ground running when a transaction closes. See less -