Tech M&A: Preparing Your Tech Business for Sale
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Tech M&A Preparing your tech business for sale grantthornton.com/duediligence
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Transcript of Tech M&A: Preparing Your Tech Business for Sale
Tech M&APreparing your tech business for sale
grantthornton.com/duediligence
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CONGRATULATIONS!You have an offerYou've attracted a possible buyer:
But what's next?
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The due diligence process
The acquirer will now look closely
at your company:
• Financials• Operations• Systems• Performance
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Issues can lower the price
Multiple issues can suggest more systemic problems, leading to a drastically lower price or, in extreme cases, deal cancellation.
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Preparation is keyFind out what you need to know now — it's time to take action.
Next up, the 6 critical areas of focus in preparing for acquirer due diligence.
Want to get the big picture? Read the full article>
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#1: Financial due diligence
How robust are your financials?
Key areas to consider:• Working capital trends
• Receivables
• Active clients
• Sources of value
• Financial systems
• Accounting methods/policies
TIP: Base your analysis on billings data to show thetie to financials; properly account for credit memos.
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#2: Tax due diligence
Key areas to consider: U.S. and foreign income taxes
State and local taxes/Sales tax
Unclaimed R&D tax credits
Accumulated NOLs for federal income tax
Corporate structure and change-in-control agreements
How complete and current are yourtax records?
TIP: Prepare detailed records over a range of years.
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#3: IT due diligenceAre your IT infrastructure and systems a potentialintegration obstacle — or even a business risk?
Key areas to consider:• Network architecture
• Use of cloud services
• Information flows
• CapacityTIP: Proactively flag any platforms, functions or strategies that may pose challenges. Read more>
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#4: Operational due diligence
Can your company deliver the expectedmarket value post-acquisition?
Key areas to consider:• Software/intellectual property
• Confidentiality policies
• Key employees
• Documentation
• Software release calendar
• Mix of direct sales/resellers
TIP: Be prepared to share details on product development, launches and coding.
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#5: HR due diligenceWill the buyer be able to retain key employees and their client relationships and institutional knowledge?
Key areas to consider:• Effective communication
• Proactive outreach
• Recruiting
• Compensation packages
TIP: Identify and communicate with key employees.
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#6: Cultural due diligenceAre values and culture a good fit?
Key areas to consider:• Communication
• Transparency
• Inclusion
Download the presentation>
TIP: Identify the key cultural attributes of the acquirer and seller to highlight commonalities and resolve differences.
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Be proactiveEvery facet of your company’s operations – the underlying financials as well as individual functions, systems and performance – will be under the magnifying glass. Start preparing now.
Marc ChiangPartnerTransaction Advisory ServicesGrant Thornton [email protected]
Steven PerkinsManaging DirectorTechnology Industry PracticeGrant Thornton LLP703.637.2830 [email protected]
InformationContacts
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Ready to start your own pre-deal due diligence review? Contact Steve or Marc today.
