A lawyer’s work often involves factual research regarding clients, opposing parties and circumstances. For example, factual research concerning an industry may be necessary for contractual “gap filling” - interpreting an ambiguous term in a contract. Understanding the facts underlying an industrial accident will be necessary to help determine if a client is liable for damages. Gathering facts about a company will also be essential if it is the target of a purchase by your client. Is the company burdened with a debt? Will the acquisition violate competition law rules? Does the target company’s environmental record comply with the policies established by the shareholders?

LEARNING SYNOPSIS
This exercise examines resources and strategies for doing online research into companies.

EXERCISE
The partner in charge of mergers and acquisitions at your firm has been contacted by a potential new client who could generate a lot of revenue for your firm. This client has contacted your firm to conduct some preliminary fact-finding regarding a rumoured merger.

The client is the distribution arm of an international publisher of financial newspapers. One of its largest markets is Canada and the United States, which together account for approximately 45% of their circulation figures. It is believed that the largest distributor of newspapers and periodicals in North America will shortly acquire the second biggest player in the North American market. This acquisition would create a less favourable competitive market for buyers of distribution services. As transportation and distribution costs account for nearly half of your client’s expenses, this is a matter of immediate concern.

The client has long considered acquiring its own distribution network in North America, and is now feeling the pressure to act. There are a number of possibilities, including the acquisition of one of the top North American distributors. In order to avoid prematurely inflating the price of a possible target company, the client wishes to make discreet enquiries regarding some of the distributors.

The partner in charge of mergers and acquisitions wants to carry out thorough research quickly and discreetly. She asks you to complete the following tasks:

1) Compile a list of sources of information which could be used to quickly research North American companies. Outline the kind of information that can be found from each of these sources.

2) Provide a one-page memo with detailed information on Knight Ridder, one of the companies your client is considering acquiring, including the following information:

• details of the services Knight Ridder supplies;
• key competitors;
• number of employees;
• name of chairman/CEO and CFO;
• sales figures and net income for last year;
• recent mentions in the media, including date and publication;
• current stock price;
• most recent SEC filings.