IT Due Diligence in M&A

By John Bisack, President and Managing Director, Performance Improvement Partners

As the snow melts, uncovering the buried grass, I revisit the importance of IT due diligence in M&A transactions.  M&A due diligence is essential to uncovering the opportunities and risks that lie buried within a company fabric.  The intricacies of IT can be an overlooked diligence stream, however, the technical processing environment has a profound impact on the growth and success of a company.

While all aspects of a diligence are complex, the level of specialized knowledge involved in IT is unique.  There are many technology solutions and options as well as multiple systems in place, not to mention the complexities and cost associated with the technical infrastructure.  Documenting what is in place, identifying opportunities and risks and looking at how the current environment is poised for growth, is an important task requiring unique approaches and skill sets.

More private equity firms are opting to perform an IT diligence in advance of a transaction.  A rigorous and focused approach to understanding the IT situation in the M&A diligence process could prevent a great deal of failure down the road.  Most importantly, it can identify opportunities to create significant business value and ultimately increase enterprise value.

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