Technology due diligence: know the cost before you sign
Establish what the target’s technology will cost to integrate or separate, and what that means for the value case.
Heremba owns the technology diligence workstream. We assess the estate against the deal’s intended end state, translate findings into cost, timing and risk, and carry the implications into the delivery plan. The assessment distinguishes evidence from assumptions and records what available access cannot establish.
Diligence carried through to Day 1
Pre-deal diligence carried through to Day-1 continuity.
Price the estate you will inherit
The target’s current IT spend does not describe the cost of ownership after completion. Shared services may need replacing. Group licences may require review by counsel and procurement. Systems that work inside the seller’s estate may need additional infrastructure, support or integration before they can support your plan.
The question is what changes with the transaction. A cost-synergy case needs a view of the spend that can be removed and the work required to remove it. A growth case needs evidence that the technology can support the intended scale. A carve-out needs a clear distinction between assets inside the perimeter and services supplied from outside it.
Technical due diligence for acquisitions should make those dependencies visible while the deal team can still consider their implications. An inventory alone does not provide that position. The findings need to explain the effect on the business and identify the work required after signing.
Assess the technology against the deal
Frame the scope
We start with the deal type, perimeter, Day-1 requirements, intended end state and sources of value. These establish what the assessment must test. A target being retained on its own systems raises different questions from one being absorbed into an existing platform.
For IT due diligence for private equity, the scope also connects the acquisition to the hold-period plan and exit requirements. For corporate buyers, it considers the destination estate and the capacity needed to integrate the target. Venture and growth investors need the assessment to test the technology assumptions behind the growth plan.
Establish the evidence
Our Technology Discovery Framework structures the work across the business, technology estate, transfer dependencies and cost implications. We examine source material and operational evidence alongside information from the target. Where a point cannot be verified, it remains a recorded gap.
The assessment considers applications, infrastructure, data, security, support and supplier dependencies in the agreed scope. Contractual interpretation remains with counsel. Our role is to establish the technical requirements and identify where contract or licensing questions could affect cost, continuity or timing.
Translate findings into decisions
Each material finding needs a consequence. We distinguish ongoing run cost from one-time transition or remediation cost. We identify the assumptions behind estimates and the dependencies that could change them. The resulting position supports the deal team’s decisions and the work required from other advisers.
Where the value case depends on the condition of particular datasets, a separate data assessment can provide deeper evidence. Data Readiness & Assurance examines selected datasets under the agreed access arrangements. It complements the wider technology assessment without turning every diligence engagement into a full data-profiling exercise.
The outputs the deal team can use
The engagement defines the required depth and format. The diligence deliverables are organised around the decisions ahead:
- Current-state technology and data viewthe estate, dependencies and unresolved evidence gaps.
- Application and data inventorythe assets in scope and their operational relevance.
- Risk and issue registerfindings, supporting evidence and the action each requires.
- Cost drivers and assumptionsone-time and ongoing costs, with the basis of the estimates visible.
- Options assessmentthe implications of retaining, migrating, integrating or replacing relevant technology.
- Day-1 requirements and transition roadmapcontinuity needs, sequencing and dependencies.
- Summary and recommendationsthe technology position for the deal team and investment committee.
These outputs connect the assessment to separation or integration planning. They do not replace the client’s investment decision or the advice of its financial, legal or tax advisers.
From pre-LOI assessment into delivery
A Rapid Read provides a focused pre-LOI technology assessment using the information available. It identifies the technology questions that warrant further investigation and records the limitations of early access. Fuller diligence develops that position as evidence becomes available.
Within Our M&A Technology Framework, diligence feeds the work between signing and Day 1 and the programme that follows. Findings about seller dependencies can inform separation requirements. Integration findings shape the roadmap. The evidence remains useful because the assumptions and unresolved questions travel with it.
How the engagement works
Scope and timing
Bring the decision deadline, proposed perimeter and available information. We agree the assessment scope and reporting dates against those inputs. Access, the number of material systems and the complexity of the transaction affect the work required. We do not attach a universal duration to different deals.
Work with the existing deal team
Heremba owns the agreed technology assessment and works alongside the client’s deal team, internal IT and other advisers. The scope identifies the input required from the target and the decisions retained by the client. Reporting should make outstanding evidence and dependencies clear before they become surprises at the deadline.
Questions deal teams ask
What does technology due diligence cover?
The assessment covers the technology estate and dependencies relevant to the deal, including systems, infrastructure, data, security, support and cost. Its scope follows the perimeter and intended end state. Findings are translated into integration or separation implications, with evidence gaps and the assumptions behind estimates made visible.
How long does technology due diligence take?
Timing depends on the transaction scope, evidence available and decision deadline. We agree reporting dates after establishing those requirements. A pre-LOI Rapid Read is narrower than fuller diligence. Where access remains restricted, the report identifies what could not be verified and what further work is needed.
How much does the engagement cost?
We scope the engagement around the decision required, the estate to be assessed and the access available. Those factors determine the work and fee proposal. The initial discussion establishes the perimeter and reporting requirements; we do not apply a published fixed fee to every transaction.
What happens to the findings after signing?
The findings can become inputs to the Day-1 plan, separation requirements or integration roadmap. Cost assumptions and unresolved evidence gaps remain visible as the programme develops. Heremba can own the agreed delivery workstream as a subsequent or continuing engagement, with its scope and responsibilities made explicit.
Can diligence proceed before full data-room access?
A Rapid Read can use the information available before an LOI to identify material technology questions and the scope for further assessment. Its conclusions reflect the evidence available. It does not treat limited access as confirmation that no risk exists, and unresolved points carry into fuller diligence.
Establish the technology position
Discuss the target, the intended end state and the date of the decision. We can then scope the technology work needed before you sign.