The process of evaluating new investments involves due diligence, that is, an analysis of the likelihood that a company will succeed, usually through analysis of a range of issues including intellectual property, competitors, management teams, financial structure, and others.
All agreed that joining a MAT was a decision that needed to be taken carefully, involving due diligence, trust, a shared ethos, establishing what practices could be shared and whether the organisations were a good fit.
All those involved in due diligence will be expected to take a "risk-based" approach and "reasonable" measures (translation: more commonsense, less box-ticking).
In response, Actavis was granted seven days to make an offer, enough for a team of 50 people to trawl Alpharma's books and for a refinancing facility to be set up. "They only gave us seven days in order to get rid of us," chuckles Mr Wessman, who gets personally involved in due diligence at target firms.Integration is also speedy.
The idea is to replace the army of auditors that are involved in providing due diligence and oversight for negotiations and transactions that involve proprietary information.
In terms of the ABN Amro acquisition, the FSA said RBS proceeded without appropriate heed to the risks involved and with due diligence from the Dutch bank that in April 2007 amounted to "two lever-arch folders and a CD".
Regardless of the difficulties and cost involved, not undertaking basic due diligence to protect migrant workers in business relationships is unacceptable.
Business cannot determine how much prevention or mitigation it should engage in to meet environmental or social risk – stakeholders and rights-holders have to be involved for thresholds of due diligence to be legitimate (sometimes even if these are clearly determined in law).
"Alternative financing will be more expensive than typical loans because there is much more due diligence involved," says Suskavcevic.
"AT&T had to be convinced that cable could be used to deliver voice services," says Nicholas, who declines to say when Broadcom became involved in AT&T's due diligence before the acquisition.
For example, the due diligence involved in buying a post office may only be one or two days of your accountants' and lawyers' time.
