With a seasoned team of core specialists who understand industries and applications we deliver PE firms actionable pre-acquisition IT due diligence reports and post-acquisition IT strategies based on a founding principal that technology is a facilitator of a positive liquidity event.
Why do a Pre-Acquisition IT Diligence?
- Understand risks being undertaken relative to business continuity
- Understand investments necessary to maintain competitive pace
- Understand investments needed if technology is a differentiating aspect of the business
- Understand what investments may increase the valuation at exit
- Understand how well a company is positioned for growth (can IT support the growth)
- Understand where opportunities for business efficiencies exist
- Understand where gaps exist in technology which will require near-term investment and impact value of company
- Understand where opportunities exist for technology to enable business growth
- Ensure proper organization in place to support aggressive business strategies that impact technology footprint at company
When should you do a Pre-Acquisition IT Diligence?
- If IT costs appear too high or too low relative to like businesses
- If it is an integration or carve out, critical to understand what comes/what goes/which business has better footprint, etc.
- If it is a technology, software, ecommerce, or data services company – R&D, Product Roadmap, Organizational skills, Methodologies…things that make or break a technology based company
- If the industry vertical is highly automated in business processes and typically has lower margins
- If they recently had new technology implemented…understand whether they really have it in and stabilized or if it is a shell creating operational inefficiencies
- When there are signs that there are data issues
- When there has been high turnover in IT leadership/resources
We offer three kinds of due diligence engagements, depending upon status of the Portfolio Company(ies) being considered for investment.
Stand Alone Acquisitions
A comprehensive four-step evaluation of a prospective investment to determine future technology needs.
- A review of the business from a strategic, business operations and IT perspective.
- An end-to-end review of the business flow (marketing/sales, operations and finance) and a detailed analysis of the IT infrastructure.
- Comprehensive deliverable reports which include detailed findings and observations, specific recommendations and investment requirements.
- A PIP comparative scorecard vis a vis marketplace standards. PIP would also be available to work with the internal team, as appropriate, to implement recommendations.
Add-on acquisition deliverables include a detailed business process and technical review, and a high level integration plan which articulates the specific activities, time-frames, milestones and costs required to integrate the business operations and technical processing environments of the acquired and acquiring business. The final report also provides a high level picture of how the combined businesses will look upon completion of the integration efforts. PIP can also assist or act as team leader in integrating the Add-On acquisition.
Carve-Out diligences begin with gathering an understanding of the relevant business factors to create specific decoupling objectives. This analysis is converted into a detailed plan with milestones and deliverables that are developed with the client organization to ensure all factors are considered. PIP then actively manages the decoupling plan to ensure the desired results are achieved in a timely and cost effective manner.