Buyer Due Diligence

( Information Technology )

Acquirers are very careful about exercising DD while another company. However, the seller also needs to be careful about exercising the DD to evaluate the business plan and the strategic alignment of the buying company. 

Legaligence was associated with a software product company as a strategic consultant to evaluate  and compare prospective buyers. The following are some of the key strategic fit issues that Legaligence looked at and evaluated as a part of this DD: 

1. Important technology, products, market access and reputation of the acquirer.
2. Analysis of financial reports for the last 3 years.
3. Key personnel in the acquiring company and their backgrounds. 
4. Analysis of product and technological synergies and strategic fitment of the seller’s products in the acquirer’s portfolio
5. Analysis of operational and financial synergies 
6. Identification of the best prospective buyer from two perspectives – Long strategic existence in the acquiring company and highest valuation (price)

The software product company was sold to an american software conglomerate at a high price within 1 year of Legaligence submitting the DD analysis and recommendations.