Pre-Close Technology Diligence
Middle Market HVAC Service Platform | Pre-Close Technology Diligence
By quantifying the future investment required and highlighting areas for quick operational wins, Liberty helped the Buyer reduce risk and negotiate more effectively.
Impact At A Glance
Accelerated Post-Close Value Creation
Supported the Buyer’s long-term growth strategy with a technology enablement roadmap
Mitigated Operational Risk
Identified practical, low-cost IT improvements
Strengthened Negotiating Leverage
Provided Buyer with quantified ERP risks and costs
Project Overview
A middle market investment firm was in the process of acquiring a $60 million HVAC services platform. Having completed financial diligence and other third-party assessments, the firm sought to validate the Target’s technology environment—especially an ongoing ERP implementation that was critical to operational integration. Liberty was brought in to lead Technology Diligence, with a dual mandate: assess the robustness of the company’s IT ecosystem and evaluate the risks and future investment needs associated with the ERP project.
The Business Problem
The Target had undergone multiple acquisitions over a 2–3 year period and recently began consolidating operational technology into a single ERP system. While the objective was to streamline field service and back-office operations, the ERP rollout was already triggering significant disruption due to poor program governance, inadequate budgeting, and a lack of strategic oversight. The Buyer was concerned that, without deeper visibility and planning, post-close integration would be further delayed, potentially hindering performance and value realization. They needed a clearer picture of what it would take to stabilize and scale the system post-acquisition.
Our Solution
Liberty deployed a cross-functional diligence team to conduct a comprehensive evaluation of the Target’s IT landscape and ERP program maturity. Our scope included:
IT Ecosystem Assessment: Analyzed infrastructure, application architecture, cybersecurity posture, IT support functions, and financial allocations.
ERP Implementation Review: Evaluated system suitability, implementation governance, change management practices, and total cost of ownership.
Stakeholder Interviews & Benchmarking: Engaged leadership and key users to understand pain points, gaps, and alignment with business goals.
Scenario Planning: Modeled the cost and operational impact of migrating additional functions (HR, inventory, procurement) to the ERP system.
Value Creation Recommendations: Delivered actionable insights for IT efficiency gains, integration acceleration, and post-close enablement.
The Outcome
Our diligence efforts provided the Buyer with a clear and realistic view of the Target’s technology readiness and ERP maturity. We found that:
The selected ERP system was fit for core field service operations but not fully deployed across the enterprise.
Program governance and budgeting practices were insufficient to support a scalable rollout.
Future spend would be required to expand ERP capabilities across non-finance functions.
Key Deliverables:
Cost estimates for completing ERP migration
Identification of critical risk areas and mitigation options
Strategic negotiation leverage for the Buyer
Our work had a significant influence on both the deal structure and post-close planning. By quantifying the future investment required and highlighting areas for quick operational wins, Liberty helped the Buyer reduce risk and negotiate more effectively. The Buyer entered the transaction with a stronger hand and a clearer path to integration success.
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