Software Due Diligence Checklist For Better Tech M&A Deals

Software M&A deals are easier, faster and better value when a thorough due diligence investigation has been done.

In a deal where technology has a high strategic impact, it is important to have a clear understanding of the value of the technology and how it impacts the business objectives of the transaction.

Through a series of questions in the due diligence checklist, we can gather information that helps to connect the business strategy with the technology and then further enables a deep dive evaluation of the technology because the objectives are clear.

Avalia has extensive experience working with companies to assess the value of a technology acquisition and helping organizations build roadmaps for technology evolutions. Through our experience and numerous implementations of our unique process, we have identified a few key areas that can be used to evaluate a software transaction.

Depending on how much time you have to perform the assessment, use the sample agenda below to help guide your discussions with the target.

Basic Agenda: ½ day meeting with the client

Topic	Who to speak with	How long to focus on
Company History	Management	0.5 hours
Product Introduction	Management Product Manager	1 hour
Customer History	Marketing	0.5 hours
People	Management HR	0.5 hours
Development Process	Technology team	1 hour
Operations & Support	Tech Leader	0.5 hours

Comprehensive Agenda: 1 ½ days meeting with the client

DAY 1: Topic	Who to speak with	How long to focus on
Company History	Management	0.5 hours
Product Introduction	Management Product Manager	1 hour
Customer History	Marketing	1 hour
People	Management HR	1 hour
Development Process	Technology team	1.5 hours
Operations & Support	Tech Leader	1 hour

DAY 2: Topic	Who to speak with	How long to focus on
Build: Software Architecture	Lead Architect	2 hours
Run: IT Architect	Devops	2 hours

In the first post of this series, we will cover the company history and background. 

Understanding the evolution of the company is important in determining any cultural sensitivities, product resilience, and to assess how deeply rooted the software may be in the company’s development culture.

It also helps to provide the context around the business objectives and plans for growth and this in turn helps us to obtain a deeper understanding of where the technology is headed.

You can gather information about this area by asking the following questions:

COMPANY HISTORY AND BACKGROUND

1. When was the company founded and/or last acquired?

2. List the important events in the company’s history

3. Describe the company’s objectives and priorities (current, last 6 months, next 6 months)

4. Describe any historical mergers, acquisitions, or divestitures

5. Describe any historical ownership changes