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Merger IT Due Diligence

Know the company you are going to marry

Mergers and acquisitions are often turned to as means of one business expanding its revenue streams, investing in new markets, or bolstering its current products or brands. But oversights in evaluating potential security issues and IT infrastructure can prevent companies from fully understanding the risks accompanying a potential merger, making it difficult to understand the Total Cost of Ownership (TCO) and leading to unexpected costs during the merger process.

The Role of IT Due Diligence in a Potential Merger


It is the responsibility of due diligence to fully assess the costs, risks, and other potential hang-ups of a proposed merger. Due diligence can come in many forms, focusing on areas of finance, management, and operations. IT Due Diligence can increase value to companies when it is used as a complement to other, traditional forms of evaluation and assessment.

 

Evaluating Integration Issues


IT Due Diligence can identify potential issues in areas that are overlooked or not covered by other forms of due diligence. This can include software compliance, regulatory issues, or integration roadblocks, to name a few. IT Due Diligence can involve many phases of assessment, including risk analysis, TCO validation, and a layout of the post-acquisition IT costs a company can expect following the completion of an acquisition or merger.

 

New IT Organization and Systems Structure


IT Due Diligence evaluates the IT organizational structure of a proposed merger as well as the service support functions and IT service delivery offerings already in place. This comprehensive assessment of IT functionality and infrastructure helps businesses prioritize their efforts in addressing IT concerns in the process of a merger, and a long-term analysis of all IT considerations provides information that may influence valuations as businesses try to agree to the terms of a merger.

 

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