Technical Due Diligence

Technical Due Diligence

Investments and acquisitions are inherently risky and the competition for software based investments is intense. To successfully win the deal and achieve the right return on investment, Private equity (PE), corporations and other investment firms must quickly identify risk and opportunities, through the bidding process to close.

At Crosslake we collaborate closely with your team on your tight timelines to identify technical risks, opportunities for growth, strengths to build upon, potential areas for cost reduction and additional investment. We help increase your confidence that your investment is sound and will achieve the anticipated return as well as how your potential investment stacks up against other relative companies. And we do this with a business focus using language that is easy to understand, even for non-technical people.

Crosslake’s past technical due diligence activities include:

  • Identifying legacy and obsolescence issues
  • Software scalability to meet growth objectives
  • Team efficiency and productivity
  • Open source exposure
  • Acquisition integration inefficiencies and opportunities

 

The Process

We do this using a proven formula focused on product strategy and roadmap, software architecture, development practices, R&D costs, people and organization, IT/Operations practices and spend, and support and services. Of course, diligence is not an exact science, and that’s where substantial technology experience comes in to play helping with the “art” of the investigation.

Technical Due Diligence Process

Success Stories

Here is how we’ve helped a number of investment firms with technical due diligence.

Legacy Technology

In a recent technical due diligence, Crosslake determined that the company to be acquired was using legacy technology that would prove challenging long-term.  Recruiting experienced resources would be difficult and the support horizon would be limited. Because the technology was dated, it also lacked some modern efficiencies and analysis tools that are considered best practice by today’s software development standards.  In order to assess the true risk, Crosslake was then asked to provide an analysis of what it would take to convert to current technology.

Improving Efficiency and Productivity

A firm researching a potential investment was concerned about the acquisition’s ability to meet its development deadlines.  During the technical due diligence, Crosslake determined that the company to be acquired was on track, but it was using traditional heavy development processes.  Crosslake’s recommendation was to update those processes to current best practices to improve efficiency to deliver the current projects 6 to 9 months faster to provide significant cost savings.

Architecture Scalability

After analyzing a healthcare platform, Crosslake determined that the software lacked a true development architecture. The product had essentially been cobbled together over the years and architectural change was necessary to continue to maintain, scale, and evolve the product.  With that information, Crosslake’s client decided to acquire a competitor and build upon its platform.

We found the Crosslake Technical Due Diligence report and subsequent read-out very helpful, thank you. Easy to understand for laymen like us, yet very thorough and detailed. Well done!

Investor Client

Sell-Side Technical Diligence

Being well prepared for exit is important for a smooth diligence process, gaining buyer trust and ultimately an optimum transaction value.  Taking the time and effort to identify and explore possible issues could be the difference between a successful sale and a long contentious negotiation to close.

Having performed hundreds of due diligence assessments, we know what to look for and how to address the risks before they become issues.  Click here for more details on Sell-Side Diligence.

To Get Started

Through a collaborative engagement with your investment leaders and associates, we identify the risks, opportunities for growth, and strengths based on your investment objectives ensuring confidence in the technology, people, processes, and tools. We understand private equity and, in particular, mergers and acquisitions, and are ready to turn around your diligence quickly on your timeline.

Are you ready to take action?  Getting started is easy. Just contact us.