Mergers and Acquisition Technical Diligence

Centric performs technical diligence utilizing a predictable, consistent, and thorough framework.

The Business Need

A Private Equity (PE) fund was created to invest $250M purchasing companies in the Financial Services Payments arena. Target companies primarily consisted of Independent Software Vendors providing products and services to process various types of financial payments.

The buy out fund had abundant financial, market, and operational experience, but lacked the ability to assess the target company’s IT operations used to build the products and applications that were the primary source of the target’s top line revenue. The PE fund needed a quick, efficient, consistent, and predictable mechanism for evaluating the technical ‘goodness’ of products as well as the surrounding management processes and operations that delivered the products to the market. Finally, the fund desired to understand the urgency and approximate cost of fixing anything determined to be unacceptable during the initial assessment.

Centric’s High-Impact Approach

Centric was engaged to perform Technical Diligence because of its broad experience and expertise in project and product management, software architecture and design, and IT operations including data center management. Centric was able to provide the needed resources on short and aggressive timelines typical during the M&A process while working to meet pre-determined budgetary constraints.

Centric created an IT assessment framework that included an assessment methodology, rating scorecards, and findings write up.

Research and interviews were performed gaining needed information while at the same time representing the acquiring company in a manner that increased the likelihood of the deal.

Assessment findings were documented to complete diligence check lists. Write ups included candid and helpful feedback designed specifically to provide deal negotiation leverage and ultimately lay the groundwork for post acquisition integration planning.

Results

Centric’s Senior consultants were able to become members of the deal team playing a crucial role during the evaluation of the acquisition targets. Standardized assessment results facilitated efficient communication across PE investment teams as they evaluated various deals. Diligence costs were controlled due to predictable budgets. Initial post-acquisition integration plans for high priority activities around critical areas such as security were also developed.