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Why M&A Technical Due Diligence is Crucial to Create Value
December 24, 2021 at 10:30 PM
Image of a guy with a laptop providing M&A technical due diligence for a client.

The first step in value creation for private equity firms is technical due diligence. Gathering extensive and detailed data about an asset enables you to establish a value creation strategy that takes you from acquisition to exit, making the most of every day. Due diligence examines the impact of software and hardware currently and in the future. Comprehensive data collection and analysis can enable your company to seize opportunities other private equity firms missed. Seeing the true potential of an asset with M&A technical due diligence can mean avoiding red-flag organizations or maximizing value creation before exiting.

What is technical due diligence?

There are many reasons for technical due diligence, either by a venture capitalist, investment, or private equity firm. It usually takes place before investment, an OEM deal, or mergers and acquisitions.

The due diligence evaluates and analyzes technology, processes, and organizations for their worth, future value creation, and ability to deliver on promises. An experienced consultant can identify potential red flags and pitfalls before M&A, giving both the buy and sell-side high-quality information about technical investments.

Why is due diligence crucial before purchasing a company?

Technical due diligence goes further to examine potential investments both in their current and future capacities. Working with software professionals like Dagger Group gives you industry expertise to detect and identify risks. Consultants will also help identify opportunities for investments that have the potential for significant value growth.

Technical due diligence is crucial before M&A, so you are fully informed about the technology and protected against unforeseen challenges and pitfalls before moving forward with the acquisition process.

How can technical due diligence impact your value creation strategy?

As part of due diligence, a consultant collects essential data for developing an early value creation strategy for the time following mergers and acquisitions. Private equity firms get a market advantage by the wealth of data acquired by technical due diligence in developing crucial action plans for value creation prior to M&A.

Your firm can enter into mergers and acquisitions with a holistic idea of the technical investments. The expert analysis allows you to start value creation immediately following a merger or acquisition by aligning investments operations and processes with technology and software.

Why should you hire consultants for due diligence before M&A?

When you sell technology, you're not just marketing its current value but its ongoing value creation and impact on the sector and society. Consultants with experience in all stages of merger and acquisition can build a narrative surrounding an asset to maximize its value before selling.

Due diligence evaluates the technology and its ability to deliver for the buyer now and in the future. Due diligence empowers you during negotiations regarding the organization's worth and ongoing value creation as a seller.

Consultants have experienced the merger and acquisition process many times to provide guidance and expertise regarding exit strategies.

Daggerfoil Group delivers speed and quality in M&A technical due diligence for private equity firms.

We're industry leaders in consulting private equity firms throughout the lifecycle of deals on the buy and sell-side, as well as mergers and acquisitions. We take time to work alongside our clients to understand their investment thesis to offer incisive guidance for value creation and avoiding common pitfalls. Whether we're providing caution regarding red flags or creating narratives about the lasting value of their asset, we're putting years of experience and unparalleled expertise to work for our clients.

Daggerfoil Group comprises software professionals who align technology with people and processes. When you're facing a merger or acquisition, get better consultant support from our team with over a hundred engagements for M&A technical due diligence.