SERVICES - Global Due Diligence

(805) 494-1744

Global Due Diligence

MAI has significant experience in the performance of discreet inquiries that focus on sensitive business operations. As required, MAI will conduct due diligence investigations, to shield the interests of clients.

Due diligence means many things to different people and different professions. To a CPA, it generally means reviewing the accounts, balance sheets, income statements and consolidated returns, to make sure that the numbers make sense and don't conceal a diversion of funds. To a government contractor, it may mean making sure that a potential business partner is in compliance with all provisions of the U.S. Foreign Corrupt Practices Act (FCPA) or other government regulations. To an attorney, it may mean reviewing all relevant information to ensure that legal standards and requirements are met, and that contingent liabilities are understood in order to be contained.

But certain fundamental issues can sometimes be overlooked in a flurry of technical, legal and financial review. If the potential partner seems to meet these other corporate standards, the real question must be answered: Who is this person? Can he/she be relied upon as a partner and meet our requirements?

The most basic considerations are:

  1. Is the business associate or partner who they say they are?

  2. Can the potential business associates or partner do what they claim they can do?

  3. In a foreign country, do the principals have the political acess and influence they claim to possess?

These elementary considerations are often overlooked until days or even hours prior to the closing of a transaction. The reality is that multiple potential deals are simultaneously competing for scarce resources, with the scarcest resource of all being the attention of the deal-maker. But even with the pace of global business today, these basic and fundamental factors remain critical to the success of the deal.

Once a preliminary assessment is made that a transaction has merit and has a potentially acceptable return, it is time to go one step further and use the necessary resources to actively commit to the deal. Preliminary due diligence is not necessary in all deals. But all transactions that appear to have a promising potential should be fully reviewed as early as possible.

That translates into a close examination of the potential partner/associate/distributor/agent:

  1. Are they who they say they are?

  2. Can they do what they say they can do?

  3. Do the principals have the political access?

Good due diligence does not mean just "good" answers to inquiries on whether the selected partner is the right one for a specific situation. Good due diligence means that the complexity and the advantages and disadvantages of the potential business associate are examined in greater detail and then the partner is better understood. This can be an invaluable asset in the course of negotiations that are likely to require a lot of patience, understanding, compromise and maybe even manipulation using all available data and BI.

The pain of a premature commitment to an unsatisfactory business partner can be very excruciating, not to mention time-consuming and expensive. The agony associated with pursuing a deal without a true commitment can be demoralizing for all sides of the relationship. Finally, there are very real dollar costs and identifiable career "missteps" associated with closing on a deal that was never meant to be in the first place.

You can pay now or pay later. Or pay in the amount of time spent in administrative haggling, wasted expenses and wasted manpower. In which case, you can pay now, pay later, and still pay more later.


Los Angeles Headquarters:

MAI/Magallanes Associates Int'l, Inc.

Los Angeles Corporate Office

2625 Townsgate Road

Suite 330

Westlake Village, CA 91361


  1. (805)494-1744


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