65% of Investors Back Out or Renegotiate Deals Following Executive Profiling: The McLane Group.Survey of Leading M&A Lawyers and PE Firms Finds Executive Profiling an Essential Step in the Due Diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. Process NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Concerns over information found in executive profiles prompted 65% of investors to pull out or renegotiate deals, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a new survey assessing the trends in transactional due diligence conducted by The McLane Group, a leading global intelligence and risk advisory firm. The survey, "2007 Trends in Transactional Due Diligence," gauges the opinions of 237 executives responsible for mergers, acquisitions, or investments at leading private equity firms and corporate lawyers at the top law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:[1]
"Perhaps the most salient and striking finding is the sheer volume of deals being influenced or abandoned as a result of information gathered from executive profiling," said Colin McLane, Chief Executive Officer of The McLane Group. "As the importance of executive profiling is becoming more recognized, we're seeing firms increasingly turn to external specialists as the time and costs associated with a thorough background investigation can significantly outweigh the negative impact on reputation and financial results that are associated with a bad deal," he added. The McLane Group survey also found that the most disruptive revelations about the subject of an executive profile were overwhelmingly the subject's involvement in prior undisclosed illegal activities (93%) followed by a history of litigious litigious adj. referring to a person who constantly brings or prolongs legal actions, particularly when the legal maneuvers are unnecessary or unfounded. Such persons often enjoy legal battles, controversy, the courtroom, the spotlight, use the courts to punish behavior (48%). "Frankly we were not entirely surprised to find that so many deals were disrupted by finding some sort of illegal activity in a subject's past that was not previously disclosed," McLane added. "Many people believe if an infraction Violation or infringement; breach of a statute, contract, or obligation. The term infraction is frequently used in reference to the violation of a particular statute for which the penalty is minor, such as a parking infraction. INFRACTION. happened over seven years ago then it is hidden forever. However, a thorough investigation often yields results well beyond that of a traditional data dump and identifies red flags beyond seven years." The survey also found that 80% of private equity firms have a firm-wide policy to create executive profiles in every deal as part of the due-diligence process whereas only 26% of law firms report having the same policy. However, it appears as if this is counterbalanced coun·ter·bal·ance n. 1. A force or influence equally counteracting another. 2. A weight that acts to balance another; a counterpoise or counterweight. tr.v. by the fact that the law firms report that 61% of their clients request executive profiles if the firm didn't already suggest one. "Our firm's clients increasingly recognize the need to have complete and thorough executive profiles prior to making investment and business decisions," McLane said. "This is a trend that accelerated after the introduction of Sarbanes-Oxley and the USA Patriot Act USA PATRIOT Act [Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorists], 2001, U.S. and continues to grow as a normal part of the due diligence process." About The McLane Group The McLane Group is a leading provider of intelligence and risk management services to the international financial, legal, and corporate communities. The firm provides its clients with independent, reliable, and discreet data and analysis about their potential business partners and provides in-depth risk analysis and advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . www.themclanegroup.com |
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