Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Aug. 20 — The digital age of information is changing the way mergers and acquisitions and other types of deals should be evaluated, according to speakers at an Aug. 18 Bloomberg BNA webinar.
Traditional M&A practices still are important, said James A. Sherer, counsel at Baker & Hostetler LLP, New York. However, he added that practitioners working on due diligence issues need to consider whether there are gaps in their deal frameworks because of the way information is being shared, created and maintained.
Sherer and his co-panelist—Taylor M. Hoffman, a senior vice president and head of e-discovery at Swiss Re—recently co-authored, together with Eugenio E. Ortiz, a researcher with Quantitative Management Associates, a paper that argues that a framework that considers issues related to data privacy, information security, e-discovery and information governance may provide greater insight into a deal's cost and also help better define an acquirer's risks at the time of the transaction.
During their presentation, the speakers highlighted the importance of considering digital issues before a deal is completed.
Hoffman observed that conducting due diligence on these issues can help an acquirer avoid regulatory problems down the road. While regulatory fines may end up being only a tiny fraction of the overall deal's value, the better comparison is that the fine and other risk exposure typically will be more than the cost of doing a thorough due diligence, he said.
Part of this due diligence is meeting with people from the target company and speaking to them about things that may not show up on paper, Sherer said.
For example, companies may have systems in place the purpose of which may be unclear, Sherer said. The only way an acquirer can find out what the systems really are used for is by speaking to people who are working on the ground floor.
After the transaction is complete, an acquirer may lose access to these people and “knowledge about this stuff will walk right out the door,” he said.
• showing the maturity level of the target entity in areas such as data privacy, information security, discovery and information governance;
• determining greater cost certainty for the deal's bottom line and positioning the acquirer nearer to paying the appropriate amount for the target entity;
• presenting integration issues at a more opportune time and increasing the odds that the resulting entity operates as planned; and
• decreasing the acquirer's risks.
To contact the reporter on this story: Michael Greene in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)