IT Due Diligence.
Sales and acquisitions of companies are major events for the IT organizations involved. Unfortunately, the hectic pace of M&A transactions means that IT related topics do not always get the attention they deserve. This often has negative consequences, such as unresolved liability issues, subsequent claims, or the failure of planned synergies to materialize, to name just a few.
On the sell side, painstaking carve-out planning usually has a positive effect on achievable price for the company to be sold; while professional IT due diligence on the buy side can uncover risks that should be included in the price or eliminated as potential deal breakers.
An IT due diligence has a very attractive ROI, as it enables companies to significantly increase the probable business success of an acquisition and avoid potential bad investments at a manageable cost.
GAMBIT Consulting can represent the buy side and the sell side in M&A processes.
Sell side –
avoid risk discounts and liability issues.
GAMBIT can prepare the entire carve-out. These preparations can go so far as to include separating the entity from an IT perspective and operating it as an independent unit prior to putting the company or corporate division on the market. This approach enables lesser discussions of risk discounts and extended liabilities for IT issues during the buyer’s due diligence. More…
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Buy side –
know all the risks and safeguard Day 1 and realize planned synergies.
In very many M&A transactions, acquisitions fail from a business point of view because IT does not fulfill its function under the new regime. Due to the immense time pressure during the due diligence phase, IT-related potential and risks tend to be neglected. As a result, it is often too late (Day 1) before it becomes apparent whether all surrounding systems are still functioning; whether all the necessary licenses were included in the sales agreement; whether ownership of all customer and vendor master data has been transferred to the buyer; and whether planned sales and purchasing synergies can actually be achieved. In the worst-case scenario, it can turn out that the IT department acquired with the company is unable to ensuring long-term continued operations without the former corporate environment. Time-consuming and costly workarounds then have to be created at short notice – often involving the seller’s IT.
GAMBIT Consulting has pooled its experienced gained from many such projects in tools, methodologies, and competencies. Within the tight timeframe of a due diligence, GAMBIT leverages a transparent method to check whether IT harbors concealed risks that could be critical for the deal. Throughout, we always consider whether the company is to be operated separately or integrated into another company. Most recently the strategic question of whether the target company’s IT is adequately prepared for digital transformation issues such as Industry 4.0 or IoT is to be included.
GAMBIT’s due diligence focuses on factors including:
- Costs, organization, and processes (budget, skills, support, projects, and strategy)
- Applications (ERP, BI, HR, CRM, specialist applications, including home-grown solutions, and digital processes)
- Infrastructure (data center, WAN, LAN, client hardware and software, licenses, network, interfaces, cloud agreements)
On request, GAMBIT delivers an end-to-end service by additionally designing and implementing standalone operation or the entire post-merger integration (PMI), including data and process harmonization in the wake of the due diligence. More…