Compliance Lessons from the HP-Autonomy Fiasco
In a commentary on Compliance Week, Tom Fox discusses Hewlett-Packard’s troubled acquisition of software firm Autonomy, which resulted in HP writing off $5 billion of its $11.1 billion investment. “H-P and U.S. prosecutors claim that Autonomy executives intentionally inflated the company’s profit and loss statements in a manner that materially misstated the company’s value for a multi-year period,” Fox notes, adding that the story provides some teachable moments. “First, clearly HP failed to engage in thorough pre-acquisition due diligence to understand the nature of Autonomy’s finances,” Fox writes. “Secondly, after closing, H-P did an equally poor job of integration. [T]he lessons are clear: Failure to engage in an appropriate level of pre-acquisition due diligence and post-acquisition integration will doom a deal.”
