Gaining Visibility To Acquisitions

Dear Import/Export Compliance Manager,

My company, flush with cash, is on an acquisition spree.  However, I never find out we bought a company until the day the deal is announced to the public.  How can I get visibility within my company before the decision is made whether to purchase a company or not?

Ignored in Indianapolis

Dear Ignored,

Before we begin, we need to understand the mindset of the group within the company who is responsible for acquisitions.  At smaller companies where there is not a dedicated acquisitions group, they are having to manage a massive project in total secrecy while still keeping up with their normal jobs.  In this way the task, while exciting, can be thankless and quite stressful.  Also realize that the natural instinct is for them to keep the number of people privy to the project as small as possible.  Loose lips sink ships and all that, what what.

You need to make your pitch so powerful that you can overcome these obstacles within the acquisition team.  Utilize the two most powerful words in your arsenal: successor liability.  Find the worst successor liability violations you can online, particularly if they happened to a competitor or a well-known company in your industry sector.  Gather whatever evidence you can of the negative consequences of not addressing export compliance concerns upfront.  This will help you overcome the ‘why’ question from the acquisition team.

You also need to prove that you will not be intrusive (i.e. in the way).  Put together a questionnaire that covers every single topic that you need to ask about.  If you need a template, join the International Compliance Professionals’ Association (ICPA), if you haven’t already, and raid their Compliance Library for one.  Adapt it for your particular needs.  Be prepared to show it to the gatekeeper in order to assuage any concerns that you will hijack the process.  In particular, keep in mind that your questionnaire will likely be filled out by someone at the target company who is tired of filling out questionnaires full of annoying questions.  If it’s a small company with little knowledge of export compliance, make sure the questions can be answered by laymen.

The main reason the Import/Export Compliance Manager likes to use in order to justify participation in acquisition discussions is that export compliance is simply providing additional information to help the acquisition team make an informed decision.  If the company will be liable for $1 million in fines due to export violations, you can bet that, no matter how large your company, that will need to be taken into account before making the decision on whether to buy and at what price.

Now, how do you get in?  The Import/Export Compliance Manager prefers to attack it via Legal, as you can bet they are part of the process.  Use your department’s Legal contact to get an in.  If that doesn’t work or your company doesn’t have a Legal Department, contact others who are part of the process based on who you think would be most receptive.  Remember that people respond to incentives; it may be best to go after the person who would be most adversely affected should the deal turn out to be sour: the Acquisition Manager.

If you put together a good case, eliminated all concerns, found the right audience and are STILL being rebuffed, still put together all your documentation, particularly your acquisition questionnaire, so you can be ready the day you get the green light.  And keep beating on the door; you have right on your side.