The fine art of due diligence

摘要

In August, private equity firm ABRY Partners acquired consumer book and magazine publisher F+W Publications for $500 million from Providence Equity Partners. Three months later, ABRY filed a highly unusual lawsuit against Providence, alleging fraud and misrepresentation in the figures presented to ABRY during the due diligence phase of the acquisition process. The lawsuit has embarrassed ABRY and Providence, both of which declined to comment for this story. While the lawsuit paints Providence as unethical, it has caused some industry observers to question the thoroughness of ABRY's due diligence. Due diligence—the term for the research a prospective buyer performs on an acquisition target to ensure that the price is fair—has rarely been in the spotlight as it is now.