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FM Analysis IT
or a busy change programme that is often brought about by a new investment in or restructuring of the business. Its work includes IT operations reviews, IT strategy development, system selection and procurement, and project implementation support. In this respect Intuitus is able to offer its investor clients IT expertise throughout the full investment life-cycle - at the point of purchase, during ownership and at the point of exit.
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Calum has a deep understanding of the value of IT and technology due diligence in a transaction context and how these services need to be delivered. As Intuitus’ Managing Director, he has primary responsibility for client relationships and business development. The Intuitus management team’s broader experience includes technology leadership, Board-level IT management and management of complex IT projects and programmes both in the UK and abroad. Whilst most of its work is UK-based many of the companies that Intuitus assesses have operations overseas and it has been increasingly active in continental Europe.
Why would a business need IT or Technology Due Diligence?
In much the same way that one might commission a survey before buying a house, an IT or technology due diligence assessment helps the buyer to understand the merits or otherwise of the IT or
n addition to its transaction support services, Intuitus also provides a range of IT advisory services to mid-sized corporates. Requirements will typically be related to M&A planning and management
Due Dilige
Calum Stewart founded Intuitus in 2002, since then the company has become established as the leading provider of expert IT and technology advice both to private equity clients and to companies backed by private equity. Intuitus has advised in excess of 300 transactions ranging in value from £800,000 to £975 million, including buyer-led management buy-outs, buy-and-builds, carve-outs and public-to-privates, to sell-side engagements and traditional M&As. It has undertaken due diligence of companies across almost all industry sectors, from the “traditional” sectors such as manufacturing and construction to the more technology-led sectors that comprise, for example, IT service providers, network and communications providers, online and multi-channel retailers and software companies.
technology operations in the target company and this provides an opportunity for leverage that may not exist after the deal has completed.
There are several reasons why a buyer would benefit from such an assessment: It might uncover findings that have a material bearing on the valuation (and potentially the viability) of the deal. Such risks could materialise in the form of legacy systems or technologies that need to be replaced at considerable expense; an IT landscape that cannot easily scale in support of the business plan; a lack of robust data management or disaster recovery practices that could threaten business continuity; complications with third party service providers, for example contract software development resource, that could hinder the future control of key business systems, etc. On a more positive note, the due diligence could uncover opportunities for existing IT or technology operations to be enhanced, consolidated or integrated more effectively so as to improve the operational effectiveness of the business. Any such enhancements may result, for example, in improved services to the customer or business user, lower costs of service delivery, greater accuracy of management information and / or a better foundation for business growth.
Few companies operate successfully in the modern business world without a significant degree of dependence on their IT systems. Indeed, the business models for an increasing number of companies are dependent upon the effective exploitation of technology. An Intuitus due diligence engagement allows the buyer, before it is committed
to the purchase, to properly understand the extent to which IT and technology are aligned with the target company’s business plan, what the major strengths are, the implications of any material risks, what needs to be done to mitigate the risks and where there may be opportunities to improve business operations through the better deployment of IT. We have found that many of our clients include IT or technology due diligence as a standard part of their due diligence process.
Intuitus’ services are highly bespoke and what we assess will be particularly influenced by the nature of the transaction and the IT or technology landscape in the target company. By way of example, in an M&A or buy-and-build transaction, the focus may extend to the credibility of and budgets for the IT integration strategy and plan whereas for a carve-out transaction the fitness for purpose of the IT transition plan and service agreement will be of critical importance. On the other hand, if the buyer is investing in a software company, he will want to understand the credibility of the development roadmap and budget, the quality of the development team, the performance of the deployed software, the extent to which intellectual property is adequately protected etc. We always work with our clients to ensure that the scope of work is relevant and focused.
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Can you discuss how Intuitus provides IT due diligence services for
companies?
Our services are delivered by an executive-level network of consultants. These are experienced