Due Diligence Case Study for Mergers & Acquisitions
Date Published
Reading time
2 min
In this article
The client asked Sphere's leadership team to evaluate a B2B transportation hub’s technology in preparation for an acquisition. Read our M&A due diligence case study below to learn more.
Scope
In an interesting turn of events, the client placed more value on the business assets (the customers and vendor network) than the technology that ran the business. As a result, the scope of this due diligence was maintenance focused - what are the costs to maintain the technology, transition the customers, then decommission the technology over a 12-18 month period?
Assessment
The target company used an outdated operating-system as well as an external software development team. The target’s small internal team knew very little about the inner-workings of the technology. It was also learned that the external development team’s agreement included a revenue share that complicated a potential acquisition and created serious financial risk:
- Finding talent familiar with the dated technology would be difficult and expensive
- The old operating system was nearing end-of-life forcing an immediate migration to the cloud.
- Security issues from the old OS required additional cybersecurity assessments as part of the OS migration
- Re-negotiation of the external development team’s contract was mandatory.
Solution
The client was willing to take a number of risks because the business value of the acquisition outweighed the technology limitations. However, a risk mitigation plan was put into place that included:
- Renegotiate the external development team’s contract
- Migrate from the outdated OS to AWS
- Following the OS migration, lock-down security, and run “as is” for 12 months until the transition is ready
Outcome
For each risk, a mitigation plan was put in place. Understanding the risks, the client made the decision to acquire the business and technical assets of the target. The OS migration was successful. Technology mergers and acquisitions can be very lucrative if you do your due diligence.
Our M&A technology consultants bring over 20 years of experience to provide an unbiased assessment of your M&A targets’ tech stack, software architecture, security, and technical debt to identify and assess risks. Find out more about our
technical due diligence
services here.
Find out more about our
technical due diligence services
,
strategy & consulting services
,
software development
, and more. Don't hesitate t
o call
us
if you have any questions about our
due diligence case study
or the
M&A due diligence process
.
More to read
A comprehensive, print-ready guide covering 250+ critical items investors evaluate across 11 key areas – from code quality and security to AI/ML and scalability. Includes self-assessment tools, stage-specific guidance, and a 6-month preparation roadmap to help you ace your next funding round.
Data is the fuel of modern engineering. Yet many organizations still struggle with silos, outdated files, and fragmented systems that slow down progress and innovation. In this guide, we explore how to streamline engineering data management—from strategy and governance to tools and cloud infrastructure. Whether you're dealing with massive CAD files or real-time IoT streams, this article shows you how to get your data under control and working for you.
Mergers and acquisitions (M&A) have become the catalyst of business growth. But, a successful M&A requires far more than getting the financial numbers right
