“TRUST STARTS & ENDS WITH THE TRUTH”
“TRUST STARTS & ENDS WITH THE TRUTH”
Matt is both the company founder and a nationally renowned private investigator. Matt is an intelligence specialist who excels in detecting and preventing the illegal interception of communications and in providing high-tech covert surveillance. Matt has years of hands on experience in the investigation industry and has developed a reputation for incorporating state of the art technology and innovative ideas to provide effective solutions for his clients. Matt also serves as Treasurer for the Executive Board of Directors of FALI, The Florida Association of Licensed Investigators.
Due diligence for mergers and acquisitions is the buyer’s pre-closing investigation of a target company’s finances, taxes, contracts, operations, and the people who own it. Accountants test the numbers and attorneys test the contracts. In my work at Southern Recon Agency, the deals that go wrong usually passed both reviews and still missed a lawsuit, a lien, or a second company the owner never mentioned.
M&A due diligence splits into six types: financial, tax, legal, commercial, operational, and investigative. Each type answers a different question about the target company, and each has a different professional behind it.
The U.S. Small Business Administration tells business buyers they will probably want an attorney and an accountant to review the letter of intent, contracts and leases, financial statements, and tax returns. The attorney and the accountant cover the first three rows of the table below. Investigative due diligence, the last row, is missing from many published M&A checklists.
| Type | What it checks | Who runs it | What it does not tell you |
|---|---|---|---|
| Financial | Revenue, earnings, debt, and working capital | CPA or transaction advisor | Whether the owner has a history the books never record |
| Tax | Filed returns, unpaid balances, and exposure by tax type | CPA or tax attorney | Whether liens sit under a prior entity or the owner's own name |
| Legal | Contracts, corporate records, licenses, and known litigation | Deal attorney | Lawsuits and judgments the seller left off the disclosure schedule |
| Commercial | Customers, competitors, and market position | Buyer's team or an industry consultant | Why key customers or partners left |
| Operational | Staff, systems, suppliers, and facilities | Buyer's operations lead | Who holds informal control of the business |
| Investigative | Court records, liens, licenses, ownership, and past businesses of the people behind the deal | Licensed private investigator | Valuation, tax positions, and contract terms |
Buying a company on financial and legal review alone is like chartering a ship after reading the cargo manifest and the insurance papers. Both documents can be accurate while the captain’s record sits unread.
Investigative work for a transaction falls under corporate investigations in Florida, the same practice area that handles vendor and partner misrepresentation.
The three types named most often are financial, legal, and commercial due diligence. Financial covers the numbers, legal covers contracts and corporate records, and commercial covers the market and customers. Larger deals add tax, operational, and technology reviews. Investigative due diligence sits alongside all of them and covers the people behind the target company.
Deals where the buyer depends on the seller’s word need more than financial and legal due diligence. The clearest cases share one or more of these features:
My team takes these cases for business purchases, partnerships, joint ventures, and private loans as well as mergers. Each one turns on who the other party is and what that person has done.
A buyer who only needs to vet new hires at the acquired company is looking for employment background screening, which is a narrower service.
Tax due diligence for mergers and acquisitions is a review of the target company’s tax filings, payments, and exposure, run by a CPA or tax attorney. I am an investigator, and my firm does not prepare or review tax returns. Where my team’s work touches tax is the public record.
Start with the federal side. The IRS files a Notice of Federal Tax Lien as a public document to alert creditors to its claim. A federal tax lien attaches to all business property, including accounts receivable. A search under the company name alone can miss a notice filed against a prior entity or against the owner personally, so we search every name tied to the principals.
Florida law puts part of the seller’s tax history on the buyer. Under section 213.758 of the Florida Statutes, a buyer who takes over more than 50% of a business, its assets, or its stock of goods becomes liable for the seller’s unpaid state taxes. The statute covers taxes administered by the Florida Department of Revenue and excludes the corporate income tax.
Two routes take that liability off the buyer. The seller can provide a Department of Revenue certificate of compliance showing all returns filed and taxes paid, with no insiders shared between buyer and seller. The other route is a state audit of the seller’s books that finds nothing owed. The same statute lets a buyer withhold part of the purchase price to cover the seller’s tax and pay it to the state within 30 days of the transfer.
Section 213.758 is Florida law, and other states set their own rules. Everything here is general information, so take the specifics of any deal to a tax attorney or CPA in the state where the target operates.
Tax due diligence is the part of an acquisition review that examines the target’s tax returns, payment history, and open exposure across income, payroll, and sales tax. A CPA or tax attorney performs the review. Findings feed into the purchase price, the deal structure, and the protections written into the purchase agreement.
Yes, in many cases. A buyer of more than 50% of a Florida business, its assets, or its inventory is liable for the seller’s unpaid state taxes unless the seller provides a Department of Revenue certificate of compliance or a state audit clears the seller. Liability is capped at the fair market value or the purchase price, whichever is greater.
Investigative due diligence is a background investigation of the owners, officers, and entities behind a target company. The owners who ask me to look into a seller usually start with a feeling they cannot name, and the records either settle it or sharpen it.
A due diligence investigation at Southern Recon Agency covers:
Ownership takes real work to confirm. FinCEN’s final rule, effective August 14, 2026, made U.S. companies exempt from beneficial ownership reporting, so no federal filing names the owners of a privately held domestic company. State corporate records typically list officers and a registered agent. The person who controls the company can sit a layer or two behind those names.
Shell entities raise a related problem. Invented people and paper companies are the raw material of synthetic identity fraud, and a counterparty with a thin history deserves the same scrutiny as a thin credit file.
Red flags:
Example (illustrative only): A buyer signs a letter of intent for a Central Florida HVAC company. The books are clean and the contracts check out. A records search on the owner turns up an earlier company at the same address, dissolved three years ago with an unreleased tax lien and two supplier judgments. Nothing in the data room mentioned the earlier company, and the buyer now has a specific question to put to the seller and to deal counsel.
A licensed investigator works from public records, lawful database access, and voluntary interviews. Bank records, tax returns, and private communications stay off limits without the owner’s consent or legal process.
A background check is one input to due diligence. Online background reports compile public record hits on a single name. A due diligence investigation connects those records across every person and entity in the deal, verifies them at the source, and adds interviews and license checks. The report explains what the findings mean for the transaction.
Signed a letter of intent with a seller you have known for a few weeks?
A due diligence investigation checks the court records, liens, licenses, and past companies behind the name on the contract.
See what a due diligence investigation covers
Confidential, and handled by a Florida-licensed agency (License A1400197).
The M&A due diligence process starts once a letter of intent and a confidentiality agreement are signed and runs until the purchase agreement is final. The work moves through five stages:
Deal talks are themselves a target. Executives managing M&A conversations are among the groups our corporate communication security audits are built for, since a leaked term sheet can change the price or end the deal.
In many transactions the buyer’s attorney hires the investigator directly, and my team’s investigation services for attorneys are set up for that arrangement. Ask deal counsel whether routing the work through the law firm makes sense for your transaction.
The length depends on deal size and how quickly the seller produces documents. The investigative portion of a corporate matter takes days in simple cases and weeks or longer in complex ones. On the tax side, a Florida Department of Revenue audit requested under section 213.758 must be completed within 90 days after the records are made available.
M&A due diligence costs depend on how many workstreams the buyer hires out, and each professional bills separately. Accounting and legal fees are set by those firms.
Southern Recon Agency quotes a due diligence investigation after an assessment of the matter. Three things drive the scope: the number of owners and officers, the number of entities tied to them, and the number of states where those people have lived or done business. A single owner with one Florida company is a different job from five principals and a chain of entities.
Due diligence for mergers and acquisitions covers a target company’s finances, taxes, contracts, market, operations, and the people behind it. Accountants and attorneys handle the first three. A licensed investigator handles the last, searching court records, liens, licenses, and past companies tied to the owners. In Florida, a buyer of more than 50% of a business can inherit the seller’s unpaid state taxes, capped at the greater of fair market value or purchase price. Federal tax liens are public and searchable. Ownership of private U.S. companies is no longer reported to FinCEN, so confirming who controls a seller takes records research.
Find out who you are buying from while the terms can still change.
Southern Recon Agency investigates the owners and entities behind a business purchase and documents the findings for you and your deal counsel.
Request a confidential case review
Call (844) 307-7771. Southern Recon Agency is a Florida-licensed private investigation agency (License A1400197).
Due diligence in M&A is the investigation a buyer carries out on a target company between the letter of intent and closing. Reviewers examine finances, taxes, contracts, operations, and the backgrounds of the owners. The findings decide whether the buyer proceeds, renegotiates, adds protections to the purchase agreement, or walks away.
A team of outside professionals working for the buyer. An accountant reviews financial statements and tax returns, an attorney reviews contracts and corporate records, and a licensed investigator researches the owners and related entities. The buyer’s own staff usually handle the commercial and operational reviews. Each reports findings to the buyer and deal counsel.
Yes. A licensed private investigator can research a business owner’s court history, liens, judgments, bankruptcies, professional licenses, corporate affiliations, and past companies using public records and lawful sources. Private investigation is licensed by the state in Florida, so confirm the agency’s license number. An investigator cannot obtain bank or tax records without consent or legal process.
Liens and judgments show that a creditor or government agency holds a claim against the business or its owner. A federal tax lien attaches to all business property, including accounts receivable. A buyer who finds one should ask deal counsel how the claim will be paid or released at closing and whether the purchase price should change.
The formal review ends at closing, and some buyers keep monitoring afterward. A seller who stays on as a manager or holds a seller note remains a counterparty, so new lawsuits, liens, or business filings involving that person still matter. Ask your investigator whether periodic record checks fit the deal.
Matt Aubin is the founder and managing partner of Southern Recon Agency, which he started in 2010. He is a Certified Digital Forensics Examiner, a Certified TSCM Technician, and a Florida Board Certified Investigator, and a court-qualified expert witness in cyber intelligence and cyber forensics. Southern Recon Agency is a Florida-licensed private investigation agency (License A1400197) based in Orlando.
Reviewed by Mark J. Aubin, J.D., Corporate/Legal Investigations and In House Legal Counsel at Southern Recon Agency.
The information in this article is general and is not legal, tax, or financial advice. For help with a specific transaction, talk to a licensed attorney or CPA in your state.