Mergers & Acquisitions Due Diligence

In most industries there are few standards that regulate the level of security a company provides for its assets and employees, and where there is regulatory guidance it is often requires only a minimal level of security that can still leave a  business exposed to significant liability. This leaves most organization's security programs to be driven by the risk tolerance of their senior leadership and boards of directors. 

When engaged in merger and acquisition activities a company should ensure that their new partner or subsidiary implemented a security and workplace violence prevention program that meets all their regulatory obligations and that aligns with the risk tolerance of the leadership of the new parent company. 

We have seen several companies who failed to assess their acquisitions' security programs during the due diligence process discover after the acquisition that risk tolerance of the subsidiary's former leadership was significantly  higher than they were willing to accept and that the new subsidiary's security program been neglected and did not meet their expectations. In cases such as this it can require a significant investment from the parent company to bring the security program of the subsidiary to an acceptable level. 

Even when the level of security in place in the potential acquisition is acceptable there can be unforeseen costs post acquisition if appropriate due diligence is not conducted. A significant proportion of the physical security systems on the market today operate using proprietary protocols and technology, these systems often will not integrate with each other and may require replacement across the entire portfolio of the acquired company to function seamlessly.

We have seen these unexpected cost that were not accounted for during the due diligence process cost companies millions of dollars, making what would have otherwise been profitable acquisitions a strain on their finances. 

The team at Security Advisors Consulting Group has been involved in the due diligence process for mergers and acquisitions in several industries and can help avoid surprises stemming from unexpected inadequate security or incompatible security systems post acquisition. 

 

We can assist in your mergers and acquisitions due diligence by assessing:
 

  • Whether the target company's security and workplace violence programs meet all applicable regulatory and accreditation standards.
     

  • If their security program's risk mitigation level aligns with the risk tolerance of the potential new parent company.
     

  • What the likely costs are to bring the potential acquisition's security program and systems into alignment with the new parent company's.