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Case study

Rapid Tech Due Diligence Helped a Private Equity Firm Invest with Confidence

When a leading PE firm had questions about a target’s technology—and a two-week window to get answers—our rapid analysis helped them move the deal forward.

  • min read

The Story

EquityCo* saw strong growth potential in an employee benefits administration company, but needed a more detailed picture before making a bid. The target showed promise, having launched a virtual assistant tool that was poised to catapult it to a market-leading position. At the same time, the company was still two years out from completing a planned modernization of its platforms.

Our client was keen to invest, but had lingering concerns. Would the company need additional investment to modernize its technology? How mature was its cloud migration? And, crucially, was its software-as-a-service platform truly competitive? EquityCo’s growth-oriented investment thesis hinged on answers to these questions.

Turning over every stone

After negotiating a two-week exclusivity period to perform tech due diligence, EquityCo enlisted our Tech Insights Group to evaluate key technical considerations associated with its investment thesis. As part of that process, we were tasked with uncovering blind spots, raising red flags, and guiding decision making ahead of bidding. The time frame was tight, and the list of components to analyze extensive. We quickly coordinated a technical deep dive with the leadership team, requested key technical documentation, and scheduled targeted discussions with management, along with a demo of the new customer-facing tool.

With access to the relevant platforms and players, we thoroughly evaluated the target’s technology, including its data architecture, cloud migration, and cybersecurity. The analysis revealed that the company had heavily invested in analytics for its virtual assistant, which was designed to provide a high-quality customer experience, save costs, and competitively position the company. We also learned that cybersecurity was well implemented across governance, policies, and protective measures—and was, in fact, stronger than many other companies we had evaluated.

Trusted insights, informed by expertise

Beyond a go/no-go ruling, our deliverable offered a comprehensive view of the company’s tech modernization and recommendations for areas of technical focus during the holding period. Just as important, it provided insights, evaluations, and guidance informed by our team’s decades of industry experience. We encouraged additional investment in the company’s analytics program to maintain its competitive lead, while also pinpointing areas of improvement that would make the business more robust. Equipped with a set of high-impact insights, EquityCo was able to bid with confidence. They moved quickly to invest, secure in the knowledge that their thesis was sound and there would be opportunities to increase the acquisition’s value over the holding period.

We take our clients' confidentiality seriously. While we've changed their names, the results are real.

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