Technology due diligence

Any M&A operation can be a stressful endeavor for investors that need to be able to clearly evaluate the target company’s assets and the risks related to the deal. Technology Due Diligence will help acquirers to achieve the highest possible value from the technological assets they acquire.

The importance of IT due diligence is rising for IT is becoming an ever more strategic component and growth leverage in most businesses: IT staff, products, software development processes, networks and infrastructure, intellectual property, customers, e-commerce sites, databases, cybersecurity, etc. need to be assessed for the buyer to get a 360° vision on technical, human, methodological and organisational resources and make an informed investment decision about the target technology company. The assessment may for instance result in adjustment of the transaction price.

IT due diligence consist in a technical risk review carried out by auditing the target company’s IT system to help investors determine its strengths and weaknesses and therefore determine the value of the business with a view to sustainability, maintenance cost, integration, ramp-up, scalability and evolution capabilities.

The Pentalog Institute experts are experienced technology and operations consultants. They carry out technology due diligence assessments focusing on 4 key issues in the perspective of IT:

  • quality evaluation

  • expense identification

  • employees

  • business and financials

The two main goals of this analysis are:

  • to identify any issues that could impact the deal (license agreement, source code availability, etc.)

  • to gather information needed for successful integration (product plan, hardware inventory, etc.)

Read about a technology due diligence success story

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