Technological consultation and due diligence
The goal of technical due diligence (TDD) is to identify how well an acquisition target's organization and technology assets meet the acquisition goals; inform the valuation process (what the acquirer will pay for the company or assets); and identify risks due to intellectual property issues, capability gaps in the technology assets and/or organization, and/or ability to support the go-forward business goals including post-acquisition integration of organization and assets.
Assessing the value of a technology, especially the value to potential enterprise customers, requires an understanding of the entire stack of technology. Crucial Point brings technologists to bear with deep experience in the full spectrum of enterprise IT and years of experience in performing technical due diligence (TDD) studies.
Among the risks we evaluate are:
- Risks that technology is not enterprise-ready
- Risks that the technology is not competitive or does not differentiate enough
- Risks that the technology will not scale, or is not supported well enough
- Risks that the technology is not secure enough
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, infrastructure, intellectual property, customers, 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.