Technology Due Dilligence

A Technology Due Diligence (Tech DD) is a comprehensive review of the technology environment of a business, such as IT infrastructure, software, security, processes, and tech product, with the goal to identify any potential transaction risks or opportunities in relation to the investment thesis.

Potential components of a Tech DD are:

• Assess Target’s IT landscape and technology product
• Investigate technical debt and potential IT risks
• Identify growth and scalability potential and inhibitors
• Identify integration challenges and hidden risks
• Assess stand-alone adjustment requirements
• Identify purchase price and purchase agreement adjustments based on Target’s technology and IT setup

A detailed assessment of the technical and digital capabilities of a target company can have a significant impact on deal financials, valuation, and investment thesis. The KPMG Tech DD approach is highly adjustable and is tailored towards the needs for the specific transaction at hand. We deliver both vendor and buy-side DDs, ranging from full-scope reporting to investigating a specific area. Both the supporting technology landscape and the tech product can be assessed.

During our Tech DD process we typically cooperate with other streams like Financial and Legal Due Diligence, as technology-related findings can potentially impact deal valuation and purchase agreement terms.

Depending on the agreed upon scope with the client, Tech DDs can cover, among other items, the following:

• IT strategy
• IT organization
• IT infrastructure landscape
• Applications
• Tech products
• IT vendors
• Cyber security
• IT projects

KPMG has a dedicated and experienced Tech M&A team specialized in conducting Technology Due Diligences, as well as Integration and Separation activities. The KPMG Tech M&A team is situated within the Deal Advisory practice and has a strong national and international network, enabling us to efficiently leverage the knowledge and tenure of highly skilled technology experts and Tech DD professionals with experience from thousands of transactions.

Due to the adaptability of our Tech DD framework, the output of a KPMG Tech DD can vary in size and scope. KPMG can support you with:

• Full Tech DD: A comprehensive assessment of a Target’s technology setup and tech product
• Red Flag Report: Outlining red flags and identifying significant risks of a specific transaction
• Specific tech assessments: Investigations into a particular area, e.g., cyber security, application landscape or urgently required investments
• Vendor and buy-side due diligence