News

Tory's 2013 M&A Trends

Confidental Due Diligence and Investment Screening
Financial statements and news releases alone aren’t sufficient to identifying appropriate investments in China. There are many situations in which investors do not wish to identify themselves when they first consider a merger, acquistion, significant investment or RTO. At all times, clients have their identity withheld in strictest confidence until (and if) more substantive interaction is desired. My due diligence approach is uniquely tailored to each client’s needs, usually focused on one of the following aspects: Site Visits, Strategy Evaluation, and Executive/Board Evaluation.

 
Tory's LLP has an excellent publication M&A 2013:  From Foreign Investment to Shareholder Activism – and Everything in Between.  This publication discusses the growth of outbound acquisition, and the importance of proper due diligence on a potential partner in their trend:  International Transactions.  I have reproduced a section below.
 
Partnering in the Investment

Many investors believe that having a local partner in the overseas jurisdiction is desirable or, for political reasons, a necessity. For CPPIB, having the right partner to pursue a direct investment is essential, given its co-sponsorship model for sourcing investment transactions outside Canada. For the board, performing due diligence on its co-partner in these circumstances is an entirely separate, but critical, workstream, and the exchange of information between the fund group and the direct
investment group is key. Mr. Bourbonnais says, "'Due diligencing' your partner to make sure you have the right one is as important as, if not more important than, due diligencing the deal itself."

For Scotiabank, because it typically buys its businesses gradually, it is critical to first become comfortable with the current owners and managers, who will continue to be key partners for the foreseeable future. Mr. Jentsch has found that the best way to perform due diligence on a business and its owners and managers, and also test the organization's tolerance for risk, is to "send people in the business to assess the business," rather than relying only on accounting and legal teams to do this.

 

For the entire publication, which includes the other trends of Hostile Bids, Shareholder Activism, Deal Litigation and Foreign Investment, click here:   M&A 2013: From Foreign Investment to Shareholder Activism – and Everything in Between