Posts Tagged: "acquisitions"

Privacy and Data Security Due Diligence: Best Practices for Avoiding Bumps Down the Road

Privacy and data security issues can scuttle a deal or at least cost the parties a lot of money. For example, in the due diligence process involving the 2017 acquisition of Yahoo by Verizon, Yahoo disclosed two serious data breaches that compromised over a billion accounts. Yahoo had previously attempted to cover this up. The deal went ahead for nearly $4.5 billion but not before Verizon knocked $350 million off the transaction price and Yahoo paid over $100 million to settle SEC fraud charges and class action lawsuits.

Acquisition Contamination: The Mythology of the ‘Clean Team’

Have you ever shopped for something dangerous? Back in the 1950s, my mother wanted to buy a pressure cooker to make dinner faster (and use cheaper cuts of meat). That wasn’t an easy decision, because the early models had a reputation for occasionally exploding (there was no Consumer Product Safety Commission then). My father, a self-taught steam engineer, was skeptical that a kitchen appliance could safely contain double the normal atmospheric pressure. But Mom did her homework, researching what the problems were (usually a single pressure valve prone to clogging) and finding cookers with redundant pressure relief systems. It worked for years, and no one went to the hospital. Companies shopping to buy other companies, or to acquire a license to their technology, also entertain risk. That’s because in the process of interviewing potential targets they can become exposed to highly valuable trade secrets. If any particular transaction doesn’t go forward, but the shopper implements similar technology, the disappointed seller may file a lawsuit claiming misappropriation.