Vetting a $10M Acquisition: How OSINT Found Hidden Lawsuits

Background

A mid-market PE firm was acquiring a logistics company for $10M. Standard due diligence (financial audits, management meetings) showed no red flags. The firm engaged TraxinteL for deep digital due diligence.

Investigation Methodology

1. Court Record Deep Search: We searched federal, state, and county court records across all states where the target company operated — going beyond the standard searches that only check the state of incorporation.
2. Regulatory Database Mining: OSHA, EPA, DOT, and state-level regulatory databases were searched for violations, fines, and enforcement actions.
3. Executive Background Analysis: All C-suite executives and board members were subjected to comprehensive digital background checks.

Key Findings

• 4 active lawsuits were discovered in counties outside the target's primary state of operation — these had been excluded from the seller's disclosure.
• 7 OSHA violations over the past 3 years, including 2 serious citations with penalties.
• The CFO had been a named defendant in a previous securities fraud case at a prior company, settled for $1.2M.

Outcome

The PE firm renegotiated the acquisition price downward by $2.3M to account for the undisclosed liabilities. The deal closed at revised terms with additional indemnification clauses. Total investigation time: 10 business days.