Technology due diligence for M&A

Buy-side technical due diligence

For a buyer, investor or acquirer.

• Assess the technology before the acquisition or investment completes.
• Test whether the technology actually supports the deal rationale.
• Identify architecture, code, security, data, infrastructure, supplier, technical debt and team risks, within the agreed scope.
• Identify the likely remediation and post-deal technology costs.
• Establish which management claims are evidenced and which remain unverified.

Buy-side work runs to the levels of assurance set out on Technical due diligence for investors and acquirers →, which remains the main page for investor-side work and explains how each level is scoped.

Sell-side technology exit readiness

For a founder, owner, shareholder or management team preparing for a sale.

The purpose is to find the technology issues before the buyer finds them.

• Review the areas buyer diligence is likely to cover.
• Identify missing evidence.
• Identify the technology risks likely to create buyer questions.
• Separate the issues that can realistically be fixed before the process from those that cannot, and which instead need a clear evidenced explanation.
• Improve the readiness of technical documentation.
• Prepare management for technical diligence questions.
• Prioritise remediation by transaction relevance rather than general technical neatness.

This is preparation for buyer scrutiny, not a programme to fix every weakness before sale. Where remediation would take too long or create unnecessary risk, the safer outcome is often to document the position, quantify it and prepare a credible plan.

Seller-commissioned vendor technical due diligence

For a seller.

• I assess the technology position before or during the sale process.
• Findings are evidence-led.
• Material strengths and material weaknesses are both included.
• Management statements are distinguished from independently observed evidence.
• Areas that could not be assessed are identified explicitly.
• The output can help create a consistent technical evidence base to work from during the transaction.

The scope, intended audience and permitted use of a vendor diligence report are agreed for each transaction. Third-party reliance is not implied unless it is explicitly agreed as part of the engagement.

First-100-day technology plan

For a buyer or investor, after the diligence work.

Material diligence findings turned into a sequenced plan for the period after completion.

• What needs attention immediately.
• What can safely wait.
• Remediation dependencies.
• Supplier and key-person risks.
• Technology investment priorities.
• Decisions required from leadership or the board.
• Items that should stay visible in the first board packs.

Implementation support can be separately scoped where appropriate. The first-100-day plan itself is about establishing priorities, ownership and sequence.