Case study: M&A due diligence

The owners of company A, a privately held enterprise software concern, were approached by the owners of Company B, a little-known competitor. Company B's owners expressed interest in acquiring Company A and boasted of ample resources to complete the deal. Company A's owners retained JPHI to conduct due diligence on their newfound suitor. It turned out that Company B was a holding structure for Company C, a previous venture by Company B's owners. Company C was mired in litigation with former investors and employees and was barely solvent. The ample resources of Company B's owners were mostly residential rental properties whose tenants had sued the owners multiple times for slum-lording. Company A's owners walked away, avoiding potential disaster.