The Hidden Risks in M&A – What You Don’t Know Can Hurt You

By Nona Patronite, Managing Director, Investigative Services

Mergers and acquisitions often focus on financials and projections, but substantial risks can easily be buried beneath a deal’s surface. A deal that looks solid on paper can quickly unravel when these issues come to light.

Here are just three items that may get overlooked:

Undisclosed Liabilities – Hidden lawsuits, tax liens, and regulatory violations can create post-closing financial and reputational exposure. A clean legal history today doesn’t mean there isn’t pending or undisclosed risks.
Executive Red Flags – Leadership integrity is just as critical as financial stability. Past fraud, SEC sanctions, or undisclosed conflicts of interest can indicate a culture of misconduct that isn’t likely to change post-acquisition.
Asset Verification Issues – Fake ownership claims and encumbered assets can misrepresent a company’s actual value. Without thorough verification, buyers may inherit problems they never anticipated.

Traditional due diligence can fail to uncover these risks. Comprehensive investigative diligence provides a deeper layer of protection, ensuring buyers are making informed decisions based on full transparency.

Before closing any deal, ask yourself: What don’t I know? The answer could be the difference between a strategic success and a costly mistake.

LCG Advisors is a leading financial consulting and transaction advisory firm specializing in mergers & acquisitions and other select advisory services. We offer a wide breadth of services, providing clients with one comprehensive source for high-level advisory expertise. 

For assistance with background checks and all other investigative due diligence needs, please contact Nona Patronite, [email protected]. Our experts are ready to conduct the investigations you need to assist in making the best business decisions.