CASE STUDY

Mergers, Acquisitions and Hidden Threats: When Due Diligence Isn’t Enough

by | Dec 3, 2019 | Case Study, TPRM Exposure

Executing a successful merger or acquisition is a major undertaking. There are countless details to be managed by a multitude of stakeholders against fast-approaching deadlines. Strategic issues including financials, employment, tax, and technology must all be considered within the scope of regulatory and integration considerations to ensure the smooth unification of distinct entities.

Unfortunately, more and more organizations are finding that traditional due diligence falls short in ensuring that companies that are aware of all the risks and rewards of M&A. An increasingly global environment in which M&A activity is conducted also means global risks that may not be readily apparent to the acquiror. These risks can be a threat to the organization as a whole and must be uncovered.

This is where Nisos steps in. We are capable of shining a light into what can often be a very dark and complex web of associations and risks. Beyond traditional due diligence, Nisos can conduct a deep dive into corporate intelligence on the target companies that can uncover significant risk scenarios and associated risk factors that could compromise a company’s reputation or indicate a differing valuation from the one in the term sheet. 

Deep Web, Dark Web, Hidden Databases, and Investigative Resources

Nisos threat investigators have the access, the tools, and the adversarial mindset required to accurately provide a clear picture of the cyber risk factors surrounding numerous important business decisions.

From mergers and acquisitions, to keyman and market expansion risks, Nisos performed exhaustive diligence on distinct aspects of the transaction which can prove critical from a strategic standpoint. This ensures companies undertaking diligence of target companies have the clearest picture of the history, value and risks associated with moving forward.

Our investigators dig deep into the dark corners of the digital world where few have direct access and access critical data points to inform the acquiror’s leadership as seen in this case study.  

About the Client

A large multinational corporate client was recently considering the acquisition of another company. While possessing a number of internal investigative capabilities and resources, they determined that the deal required a deep dive into the intangibles that don’t show up under regular investigations and hired Nisos.

The Challenge

The client specifically tasked Nisos to look into key executives and investors of the organization they were acquiring. There were players involved that concerned them, including nationals of countries that are possible supporters of international terrorism and notorious for their associations with criminal activity.

We Look at Things Differently

Nation-state and advanced criminal organizations have increasingly shifted their focus from government to commercial targets and as the talent and resource gap continues to widen, companies are mismatched to deal with this fight.

The low signal-to-noise ratio in the cybersecurity product market does a disservice to the global community. We are dedicated to cutting through the noise, providing genuine security to our clients and solving their intractable problems.

We provide different value. We deliver our services and provide additional value through proprietary technology, which we have scaled to enterprise levels. We regularly work across functional groups within large organizations to deliver results that augment the capabilities of internal teams.

The Investigation

Nisos investigators leveraged access to discrete databases and investigative resources worldwide to address the acquiror’s concerns regarding that backgrounds of the executives and investors of the target.

Nisos discovered credible accusations of illegal activity by the head of one of the target’s investors. This investor’s fund had some notable history, including the revelation that the head of the fund was a Russian government official accused of embezzling millions of dollars from his own government.

The same official had also been removed from a leadership position in a previous company for embezzling millions of dollars but was never prosecuted. Nisos’ investigators assessed that the target of their investigation was actually financing the fund through various illegal activities.

There was no indication that the target or the rest of its leadership team were aware of, or complicit in, the official’s illegal activities. Research on a separate executive uncovered potentially problematic political activism in Iran.

The Results

Nisos investigators were able to provide the client with a detailed breakdown of the evolving situation with their acquisition. The chief security officer and chief counsel now had additional, crucial data to add to their evolving risk calculus in order to make the best decision possible, ultimately revising the conditions of the offer to mitigate against the potential risks. Without this critical element of due diligence, the repercussions to the acquiror would have been damaging from a fiscal, reputational, regulatory and operational level.

About Nisos

Nisos is the Managed Intelligence™ company. Our services enable security, intelligence, and trust and safety teams to leverage a world-class intelligence capability tailored to their needs. We fuse robust data collection with a deep understanding of the adversarial mindset delivering smarter defense and more effective response against advanced cyber attacks, disinformation, and abuse of digital platforms.

Our Approach
We help our clients defend their organization, preserve value, prevent loss as well as defeat and attribute threats. Through our in-depth understanding of the adversarial mindset, we approach your organization and value centers as an attacker. We provide clients in-depth insights into how someone could compromise your values.

We are familiar with the unfamiliar and methodology does not rely on rigid formulas or off-the-shelf products to solve a problem. Working together, we can defeat your adversaries and level the playing field.

For additional information, contact info@nisos.com

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