DealLawyers.com Blog

Bloomberg reported last week that the latest M&A risk to balloon due diligence checklists even further is immigration compliance.

Raids have ticked up on companies suspected of employing undocumented workers, and the US Department of Labor recently unveiled plans to investigate companies’ H-1B visa practices. The information technology and financial sectors, two common sponsors of H-1B visas that go to foreigners in specialty occupations, were in the top three dealmaking industries globally this past quarter, according to S&P Global.

Here are some key takeaways from the practitioners cited in the article:

– Immigration compliance issues have the ability to slow down and even tank deals.

– Parties are engaging immigration counsel earlier in the M&A process.

– Some buyers are taking a particularly cautious approach.

– Immigration compliance risk differs by industry. (In tech, buyers might worry more about H-1B compliance; in construction, buyers might focus on I-9 verification.)

– Immigration compliance diligence may need to extend beyond the target (for example, where a target relies on key contractors).

– Meredith Ervine