Technology Due Diligence

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Trusted technology partner to some of the world’s most successful private equity funds and their portfolio companies, through the investment cycle.

What is technology due diligence?

Technology due diligence

Technology due diligence is an assessment process used by private equity firms to evaluate the technological aspects of a target company before making an investment. It involves analysing the target company's technology infrastructure, systems, intellectual property, and IT capabilities to understand its strengths, weaknesses, and potential risks. The goal is to ensure that the technology aligns with the investment thesis, identify any issues or opportunities, and make informed investment decisions based on the technology-related factors.

The importance of a flexible due diligence approach

Technology due diligence

The correct approach and scope to a technology due diligence project is the one that we decide to take together.

Many factors influence where on this spectrum a Tech DD engagement will naturally occur; factors such as technology estate size and maturity, recent acquisitions, bespoke applications in use, ongoing transformation programs, and others will influence the appropriate degree of engagement.

Additionally, clients and deal-teams may have specific requirements concerning how the analysis and results are presented, which is routinely offered as part of the engagement. This flexibility and client focus is part of the ongoing and overall commitment at Diligize to provide a flexible, well-considered, pragmatic engagement for technology due diligence.

Option 1: A “Fly-Over” (USD 5K)

Several Diligize experts deploy all their combined experience (usually 100+ years), in concert, for 1-5 days. Risks, issues and value-add opportunities are identified, leading to a high-level super summary report, including a walk-through, to explain the findings. There is typically no to very little paperwork available in this scenario, information discovery relying mainly on verbal engagement(s) with the target/client’s IT resources or wherever the knowledge can be found - a “Big 4” Tech DD Report may be available and would be reviewed and assessed.

Option 2: A “Typical” Buy/Sell-Side Tech DD (USD 10-30K)

Diligize experts will engage for 10-30 days, or until they are satisfied that the target/client technology operating model and business plan are very well understood. Risks, issues and value-add opportunities are identified. A detailed report (30-100+ slides), including a Super Summary, and a presentation walk-through is provided. Deal team support is provided all the way to deal completion.

The benefits of performing technology due diligence on a target company

Benefits of technology due diligence

Performing technology due diligence on a target company enables the private equity deal team to assess risks, determine valuation, evaluate operational efficiency, identify synergies, plan for exit strategies, and support post-acquisition integration. It provides crucial insights into the technology assets and their impact on the investment decision, value creation opportunities, and long-term success of the investment.