Why Technical Due Diligence in Mergers & Acquisitions?
The First in a Three-Part Series by Sergiu S. Simmel Due diligence is the systematic, in-depth process carried out by a party to validate claims made by a company targeted for an investment, loan, merger or acquisition. The classic due diligence covers areas such as finance (P&L, Balance Sheets, capital structure), sales and marketing (top customers, strategies and tactics, revenue models), human resources (organization structure, management, incentives, turnover), legal (lawsuits, intellectual property, insurance) and other business plan related items. Noticeably absent from the typical list is technical due diligence. This is all the more disturbing as many of the firms that are targets for merger or acquisition are technology-based companies firms where technology is either the product or plays a key role in delivering their products or services.
