In a world that is rapidly becoming more digitised, it goes without saying that technology is an absolutely integral part of virtually any business. By extension, in business acquisitions, a target company’s IT infrastructure is one of the crucial elements that a buyer will be taking on when they acquire the business.
Due diligence of a target company’s tech, then, is absolutely crucial and this importance has only intensified in the current climate. With widespread working from home massively increasing cybersecurity concerns and the growing take-up of cloud-based solutions making “legacy tech” a major financial burden for many companies, tech due diligence has never been more vital.
Ensuring tech is a core part of a due diligence process can help buyers avoid an unexpected and potentially costly situation post-acquisition. More than this, though, proper tech due diligence can be invaluable in providing buyers with an early assessment of how smooth the post-acquisition integration process might be and how quickly the business can be geared up for growth.
While flagging issues during tech due diligence will not necessarily make or break a deal, identifying areas that will need upgrading post-acquisition can give buyers leverage to help drive the asking price down in negotiations.
For sellers, meanwhile, recognising the key role that tech will play in a buyer’s due diligence means that steps can be taken before the business is brought to market to facilitate a smooth due diligence process and to ensure IT issues don’t derail a potential deal at the due diligence stage.
The risks of insufficient tech due diligence
Key areas to look at – a tech due diligence check list
Potential barriers to tech due diligence and how to work around them
How should buyers undertake due diligence
Ensuring tech due diligence doesn’t derail a sale
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