Vendor Due Diligence
Prepare your exit strategy
This service helps you to maximise the value of your business before an exit - by undertaking a thorough review and aiding you to remedy issues that might affect your valuation.
Helping a young business start-up - WeSwap - prepare for an IT due diligence review - see our case study
The challenge
A merger or acquisition is a very stressful time for all parties concerned. You don't want be be sold short by not preparing your IT for sale. Get ready and brush IT up.
If you are looking to sell or exit the business or even if you are looking to do a management buyout where you will be funded - you need to be assured that the technology is up to the mark and in a saleable condition, as investors want systems that work well and are secured. This is particularly the case if you have been focused on growth and have not had time or resources to keep your technology housekeeping in order.
Whilst a focus on systems is particularly important in businesses where there is online transaction processing or higher volumes of transactions taking place, it is just as applicable to a traditional ‘bricks and mortar’ business as for a company whose IT is core to its performance as failures of systems and data can soon bring a company down to its knees.
Our consultants have supported transactions ranging from small trade sales of £2 million to FTSE IPO valued at £4 billion and have acted for businesses in many sectors..
How can we help you?
- First, we first gain an understanding of the company’s business strategy and processes and anticipate what the demands for an investor are likely to be. We then review your set up - this may include, but is not limited to:
- The computer hardware and software, business systems and networks
- IT personnel and reliance on key people or external suppliers
- IT governance and budgets
- IT management processes and interruptions or interference caused by inadequate security
- Legal and compliance issues.
The deliverables: an action plan, virtual data room and mentoring
- We analyse your situation and produce a report that will include recommendations.
- We can agree an action or remediation plan which you can carry out yourselves or we can help you carry out.
- Finally, we can collate and help you document your systems in a virtual data room both for IT and other areas of the business should this be required.
How long does vendor due diligence preparation take?
Like most things in life the earlier you start the easier the process will be!
So if you are a complex organisation which has built in its own software in-house while you rely operationally on IT - we recommend that you start the process a year in advance. If you plan to IPO this is even more important. We have good knowledge of both the London and the international markets.
Whilst this time period can be compressed, any deficiencies need time to be rectified and it can be tricky especially when bespoke systems are involved. Our time will be dependent on the work, but is likely to be a few days in elapsed time over a few weeks.
If, on the other hand you are a fairly straightforward business with systems that are largely purchased from others or maintained in standard support agreements, the due diligence exercise could be done in a as little as three days on site.
Role of cloud services in due diligence to reduce risk
With our specialist understanding of cloud-based services we also advise our investing clients on whether the transaction can be made smoother, more efficient and cost-effective by using cloud-based systems either during and immediately after the transaction or on an ongoing basis.