by Kevin Clark - Thompson & Knight LLP on June 22, 2015
To be ready for a merger means being ready for a government second request for information. While not all mergers and acquisitions undergo this additional level of scrutiny, lack of preparation can put any deal in jeopardy. Without serious concessions and divestitures, there’s essentially no way to move forward should the Federal Trade Commission and U.S. Department of Justice determine a transaction would impede competition in the marketplace.
As set forth in the Hart-Scott-Rodino Antitrust Improvements Act, the U.S. government can submit a formal request for information from the parties involved in a merger or acquisition plan following the initial public filing. Called the “Request for Additional Information and Documentary Materials” and more commonly known as a second request, it can pack a triple threat of an unclear scope, a condensed time frame, and a make-or-break impact on your business.
If you find yourself in pursuit of a deal that’s flagged with a second request, here are four signs you won’t be ready:
1. You don’t have a data map.
2. Your data maps are outdated.
3. You don’t have an e-discovery platform at the ready.
4. You have no easy way to document the discovery process.
Whether your company is actively making offers, is courting offers, or has never foreseen itself on the buy or sell side, it’s impossible to predict when the right opportunity will arise. A company with a strong sense of its data has a strong sense of its value going into a transaction, as a company’s value is inextricably tied to the knowledge and information it has generated.
The challenge is that there is even more of that data than you think.
There are plenty of reasons not to panic, and the first of those reasons is that e-discovery tools streamline the process. In my opinion, proactively addressing the four warning signs boils down to two initiatives:
- Strengthening the governance of your information with an up-to-date data map
- Building a relationship with an e-discovery software provider before you desperately need one
That’s really all it takes to get started. Each of those two initiatives is a journey in itself, as other authors on this blog have attested, but you have to start somewhere. Take a look at the signs in your organization to determine how much further you have to go.
Kevin Clark is senior vice president of consulting at Compliance Discovery Solutions, a Relativity Best in Service Premium Hosting Partner. He is also the chair of the e-Discovery and Information Governance Committee of the Washington D.C. Bar and on the Programs Committee of the Legal Technology Professionals Institute, a non-profit trade association focused on developing and maintaining operational and ethical standards, best practices, guidelines, and resources.