Michael Vaz d’Almeida, Partner at Nilson Law Group, recently contributed to Inspir’, MEDEF Paris’s magazine, for its special issue, “Relation transatlantique : l’avenir en partage” (“Transatlantic Relations: A Shared Future”). Drawing on our perspective as a bilingual French-English law firm based in New York, his article explores the often-overlooked risks of acquiring a U.S. business.
Acquiring a company requires due diligence that goes beyond financial statements and contracts. Risks involving technology, employees, and state-specific regulations may not appear on a balance sheet but can significantly affect a company’s value and the success of a transaction. The article highlights three areas that deserve particular attention:
- AI and cybersecurity. Buyers should understand which AI tools the target company uses, what data it shares with those tools, and the resulting risks to intellectual property, confidential information, and trade secrets. Cybersecurity reviews should assess security measures, past incidents, insurance coverage, and incident response capabilities.
- Key employees and immigration. A business may depend heavily on a few individuals whose departure could disrupt operations. Due diligence should examine retention arrangements, confidentiality protections, and whether employees with employer-sponsored visas can maintain their immigration status after the transaction.
- State-by-state compliance. The United States should not be treated as a single, uniform legal market. Employment laws and other requirements vary across states, and remote employees can create additional compliance obligations. Gaps, such as missing required workers’ compensation coverage, can expose a business to penalties, increase transaction costs, or delay closing.
The central takeaway: Effective due diligence combines document review with detailed questionnaires and direct discussions with the seller to understand how the business actually operates. Identifying less obvious risks early helps buyers assess value accurately and negotiate appropriate contractual protections.
