Transaction Intelligence and Due Diligence

Forensic Investigations and Intelligence

Corporate Contest Hostile M&A

Helping companies gather targeted intelligence for successful defense against hostile actions.

There are few situations where the stakes are as high as in a contest for control of a company. When activist investors or hostile acquirers aim at a target, they are likely to have spent months compiling information about board members, corporate officers, and the company’s financial and non-financial performance. For a company defending itself against such an attack, understanding its vulnerabilities and weaknesses, as well as those of its aggressor, is critical for devising strategies for legal positioning, public relations, litigation and negotiation.

Kroll works alongside company boards and their advisors to provide targeted intelligence for successful defense against hostile actions. Our global teams—with backgrounds in law, forensic accounting, business, investment banking, investigative journalism, and government—research and investigate material omissions or misstatements in public market filings; undisclosed business associations; conflicts of interest; acts of self-dealing; adverse litigation or judgments; and governance shortcomings. 

Case Study – European Company Prepares for Attack

When a major publicly-held European company caught in a cyclical downturn believed it could face a potential hostile takeover, it engaged Kroll to be part of its defense team. We conducted a forensic analysis of the predator’s previous acquisitions and made discreet inquiries regarding its post-acquisition behaviors. From these findings and a forensics review of the aggressor’s corporate filings, we constructed an alternative investment case highlighting an apparent lack of transparency in the predator’s post-acquisition returns, significant ongoing litigation involving environmental breaches and examples of insensitive treatment of workers after prior acquisitions. Working with the company’s other advisors to prepare for an attack, we complemented existing information streams with findings that combined forensic financial analysis and a significant amount of non-financial information gathering. 

Case Study – Tech Firm Thwarts High-Stakes Proxy Contest

A high-technology firm sought to prevent three dissident shareholders from securing seats on the company’s board of directors. Kroll was retained to investigate the candidates’ proxy submissions; our  investigation identified discrepancies and embellishments in the board candidates’ resumés, biographies and proxy filings. We also discovered undisclosed relationships, which would have created conflicts of interest for two of the candidates should they have been elected. Due to this information, the dissident candidates failed to win seats on the board and the management slate prevailed.

Case Study – Distressed Debt 

A distressed debt fund engaged Kroll to conduct due diligence on a significant tranche of deeply discounted debt at a target company. The target was attracting considerable media attention, with ongoing speculation regarding a possible refinancing, an outright acquisition, or bankruptcy. The fund needed an enhanced understanding of how the target’s asset base was owned or managed, and of the entities that held the assets. Drawing on a range of information sources, we enhanced the fund’s understanding of a number of the target’s key assets, allowing the fund to refine its pricing strategy. 

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