From The Vault: Private Investigators and Dealmakers are Teaming up More Often than Ever!

Poised for Exit

From The Vault:
Private Investigators and Dealmakers are Teaming up More Often than Ever!

We covered an unusual topic in this episode, that we learned wasn't so unusual afterall. Private investigations within the M&A space. As buyers and sellers become more leary of the trustworthiness between them during dealmaking, the advisory team is completing the circle of trust by having what they disclose verified. Our guest today is Tom Jaeb, Founder and Managing Director of JR Risk Advisors. Tom's background in private investigations goes back to working with his brother's PI firm in 1993. When that firm sold, he and his brother took a year off to honor the Non Compete and then launched J2 Risk Advisors. This time around, their sole focus is on M&A transactions, being hired by PE firms, Investment Bankers, and others in the Dealmaking space. They verify all kinds of information that has been disclosed, and watch for red flags in areas that could be missed by the untrained eye.

You'd think that a credit report, courthouse search, and online search would bring up enough to make a case for or against a deal going through, but J2 digs deeper. They conduct research that examines the Press, Social Media, College Degrees, and other background sources as well.

Tom says that most deals are free of 'red flag' items that would derail a transaction. However, he said that each search uncovers things that weren't necessarily discussed or disclosed, simply because the buyer or seller didn't think it was relevant. Say for instance a lawsuit settlement that the company was a party to 10 years ago. The key to deciding whether research and analysis are necessary is to determine if there are patterns of behavior or isolated incidents. When it's a pattern, it's a red flag, but if it's something that happened once many years ago, they're not going to be as concerned.

Tom shared some intriguing client stories that you will find surprising! He said that Private Investigations during the dealmaking stages are more common than you think. The point about trustworthiness can be carried over from little things to big things; it's then up to the buyer or seller to decide whether to move forward.
Listen to the episode here!

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