In today's M&A landscape, sell-side technology due diligence (or vendor due diligence, or VDD) plays a crucial role in preparing companies for acquisition or significant investment. This case study details how Intium’s vendor due diligence helped an ERP solutions provider enhance its pre-sale preparations, mitigate risks, and align product development with strategic objectives, ultimately maximizing the company’s value to prospective investors.
In This Sell-Side Due Diligence Case Study:
“ Initially, we weren’t sure if technical vendor due diligence would bring value, but working with Intium helped us realize how crucial it is for our strategic planning. “
- Client’s COO
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Sell-Side Technology Due Diligence Outline
Intium’s vendor technology due diligence provided our client with the insights needed to enhance pre-sale preparations and ensure strategic alignment. Key vendor due diligence deliverables included:
Evaluating the alignment of product development with business objectives
Identifying opportunities for improving architecture and process sustainability
Developing a clear and actionable roadmap for strategic technology development and consolidation
Key personnel coaching and data room (VDR) guidance
This thorough analysis allowed the client to present a compelling narrative to potential investors, enhancing value proposition, and supporting long-term growth objectives.
ERP Company Overview
The client is a prominent ERP solutions provider in Western-Europe, specializing in scalable and customizable platforms tailored to diverse business needs. With a strong presence in their home market and expanding operations in adjacent regions and markets, the company is well-regarded for leveraging local expertise to deliver innovative solutions that empower businesses.
Sell-Side Technology Due Diligence Objective
The client offers a range of ERP solutions, including a cloud-based ERP system and an on-premise platform. The focus was to consolidate offerings around the cloud-based solution within three years while maintaining existing legacy systems.
The client sought sell-side due diligence to prepare for a potential acquisition or significant investment. Intium worked closely with stakeholders, including the executive team and the board, to identify key risks, uncover value creation opportunities, and make strategic recommendations to maximize the company’s appeal to prospective buyers.
The diligence process centered on ensuring that the target's technology platforms were scalable, maintainable, and aligned with their strategic objectives. Additionally, Intium prepared the leadership team for investor discussions, emphasizing clear communication and strategic positioning. Finally, an external report was prepared to be shared with potential buyers outlining the intricacies of the technology domain of the client, additionally providing thorough input to the CIM (Confidential Information Memorandum).
Key Sell-Side Technology Due Diligence Findings and Recommendations
Through the comprehensive vendor due diligence, Intium enabled the client to maximize value creation opportunities and improve their pre-sale preparations. Here are the key takeaways:
Alignment with Business Objectives: Intium worked with the client to align product development goals with business OKRs, ensuring that technology initiatives directly supported strategic business aims and improved roadmap execution
Architecture Strategy: We identified opportunities to develop a robust architecture strategy and documentation, supporting the long-term scalability and technical sustainability of the platform. This was critical for presenting a forward-thinking strategy to potential buyers
Mitigating Key-Person Dependency: Intium’s analysis highlighted key-person dependency risks within the R&D team. We provided actionable recommendations to mitigate these risks, ensuring that organizational stability would be maintained, even in a post-acquisition environment
Modern Development Practices: To increase development velocity and product quality, Intium recommended implementing modern development practices, with a focus on process automation and improved workflow efficiency
Investor Preparation: Intium supported the leadership team in preparing for upcoming management discussions with potential investors. This included simulating interview scenarios and providing coaching on how to effectively communicate the company’s strengths, strategic goals, and value proposition
Platform Consolidation Roadmap: To support the client’s strategic vision of platform consolidation, we proposed a rebalance of R&D efforts that would reduce reliance on legacy components while accelerating the development of the cloud-based solution
Internal & External Reports: Intium provided an internal report with specifics and details allowing the client to compile a compelling message to investors and rationalize the technology domain in accordance with the CIM. Intium also provided an external report outlining client’s technology domain in a strategic fashion, allowing investors to traverse the subject efficiently
“ Intium’s approach gave us a clear path forward, highlighting not just where the company is but where it needs to be, which provided additional value beyond traditional vendor due diligence we experienced with other providers. ”
- Director, M&A Advisor to the Client