Mergers & Acquisitions – Pre-Close Diligence
Automotive Service Provider | M&A Buy-Side IT Diligence
Liberty was asked to assess the current state of the IT and back-office operations and identify potential investments needed after the acquisition.
Impact At A Glance
Completion of a Thorough IT Due Diligence
Positive Impact on the Deal’s Economics and Overall Valuation
Project Overview
A global private equity firm was evaluating the acquisition of a privately held automotive services provider. To make an informed decision, they aimed to gain a better understanding of the current state of the IT and back-office operations. They also looked to identify potential investments needed after the acquisition.
The Business Problem
A global private equity firm was considering an investment in an automotive services provider that generates over $600 million in annual revenue. As part of their evaluation process for this new opportunity, the firm required IT due diligence. Given the size of the investment, the IT expenditures could significantly impact the deal’s economics and overall valuation. To gain a clearer understanding of the IT landscape and its financial implications, the deal team engaged Liberty for assistance.
The Outcome
Comprehensive IT Assessment
Liberty conducted a thorough IT due diligence assessment covering various aspects such as system architecture, applications, infrastructure, security, IT organization, IT spending, and digital marketing. This comprehensive evaluation provided a detailed understanding of the IT landscape.
Industry Insights
The engagement of a subject matter expert with prior experience at a competitor of the acquisition target allowed Liberty to offer unmatched industry insights, enhancing the accuracy and relevance of the due diligence report.
Timely and Efficient Process
Liberty completed the pre-work, conducted a full day on-site session, and followed up with the deal team, all within two weeks of being engaged. This efficiency ensured that the private equity firm had timely and actionable information to inform their decision.
Impact on Deal Economics
The IT due diligence helped the private equity firm understand the potential IT expenditures and their impact on the deal’s economics and overall valuation. This insight was crucial for making an informed investment decision.
Implementation of Recommendations
After the deal closed, the acquisition target implemented several of the organizational and strategic IT recommendations made by Liberty in its final report. This indicates that the due diligence process provided valuable and actionable advice that contributed to post-acquisition improvements.
Risk Mitigation and Value Enhancement
The due diligence process identified potential risks and areas for improvement in the IT operations, allowing the private equity firm to plan for necessary investments and mitigate potential risks, thereby enhancing the value of the acquisition.
If You’re Considering An Acquisition…
Contact us to learn more about how Liberty Advisor Group can act as a trusted partner for identifying risks and unlocking post-acquisition value.
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