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
This is a distribution, freight, and logistics business based in the East of England; it is now on the market.
An opportunity has arisen to acquire a company that offers design and installation services alongside planned preventative and reactive maintenance/repair.
An opportunity has arisen to acquire a business that specialises in the manufacture of high-quality conveyors and mechanical handling equipment.
Sign up to receive our acquisition alert emails to get your FREE guide
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources