Enabling Cost-Effective Acquisitions in Tight Timelines
On lightning fast timelines of under two weeks, identified key technology liability and scalability issues that dramatically reduced risk of the acquisition and reduced sale price of the company by over $10 million.
Reduced Acquisition Cost
Our findings identified key issues the company faced in scaling that would require investment, reducing the overall purchase cost
Reduced Liability
Our findings from a security and licensing perspective brought to light liability issues that were able to be remediated before the close of the deal
Actionable Roadmap
Our report detailed actionable steps for the integration of the company into the firm post-close
Fast Turnaround
Our ability to deliver results in under two weeks helped the PE Firm from missing out on their exclusivity to acquire the company
Overview
Our client, a Private Equity firm was looking for a strategic acquisition of a company that would provide key capabilities to an existing portfolio company. The firm had the target acquisition under exclusivity for a short period of time and needed Valerian to identify any key issues and liabilities but in under two weeks.
Objective
Valerian was engaged by a Private Equity firm to perform the tech diligence on a target acquisition with a limited amount of time before exclusivity expired. The firm had some questions around how scalable the company software platform was, noting concerns around technical debt and overall architecture of the system. They also wanted to make sure there were no major liabilities involved in acquiring the company.
Challenges
The PE firm was under strict time constraints to maintain their exclusivity and close the deal, requiring Valerian to perform a thorough but fast technical diligence assessment in under two weeks.
Solution
Valerian reviewed all available documentation in the Data Room, taking down notes around any potential issue and documenting questions that might shed light on any discrepancies. In tandem, we ran our suite of automated scanning tools to review code quality, security assessment, licensing issues, technical debt, and system architecture. With the output from these two main activities, we were able to get a solid understanding of where the potential issues might lie and schedule a Q&A session with the company being reviewed. These deeply informative sessions help remove false positives from our findings and refine our knowledge on the state of the systems and team. Once we finalized our understanding of the current state of the company from a technology perspective, we provided a turn-key report on all of the potential red flags and yellow flags associated with the deal in an executive summary, laying out in detail in the rest of the report our assessment of these findings, how all of the systems were organized and worked, team structure, code scan findings, architecture assessment, and suggested roadmap for activities post-close. These findings identified some key liabilities which were able to be resolved pre-close, and scaling issues with the company that the company was able to use post-close as a roadmap for their priority development items. The findings also helped reduce the cost of the acquisition by $10M due to the need for investment to rework some of the systems to make them scalable.
