IT due diligence

Heavy reliance on information technology (IT) for business operations, management information and financial reporting in today’s business environment makes IT a priority item in the field of Transactions. Not only is IT often among the largest capital and operational expenditure items, business owners must also find better ways of deriving value and leverage from IT assets. 

• Purchasers need confidence that the IT assets supporting the business are up to the task. 
• Purchasers should have a clear view on any IT investment required to maintain the EBIT of the target business and should factor these costs into their calculations and negotiations. 
• Vendors need to secure the best possible sale price. Identifying and then mitigating or addressing IT issues with transaction relevance reduces purchaser risk, which supports a greater sale price. 
• Vendors and purchasers both need to minimise the impact of the sale and transition process on business operations. 

If this is your situation 

• You intend acquiring a business that relies heavily on IT in its manufacturing, distribution and/or administration. You would like to assess the IT’s robustness in terms of security, efficiency and ability to support the business for future growth. 
• As a corporate buyer, or in a built-on strategy for private equity, you would like clarification of the IT integration costs, capex and potential synergies.
• As vendor or acquirer, you are about to dispose of/acquire a carve-out entity. You are concerned about the IT carveout impact in terms of EBIT and capex. How PwC can help you 
• By providing buyers with insightful understanding of the cost and impact of system-related issues that are relevant to the transaction being considered. 
• By identifying opportunities to improve business performance through enhanced IT enablement and cost reduction. 
• By providing purchasers with options and strategies for managing the IT-related aspects of a transaction, to avoid disruption to business operations and reduce risk. 
• By identifying IT systems options (and the capital required) for achieving postdeal strategies that are considered during the transaction.
• By providing purchasers with greater certainty that the IT systems supporting the target business are fit for purpose and identifying resources critical to continued business-as-usual operations.