Due Diligence pre-M&A

The client (PE firm) is preparing for a significant investment into a startup that already has a proven market success (Serie A funding). However they lack understanding about the startup's technological fundamentals, and they worry about the sustainability of its business model.

Industry

Finance

Client type

Private Equity Firm (PE)

Problem description

While the PE firm has unmatched competencies to assess the non-tech due diligence (Finance, Legal, Insurance, Tax, Compliance, QofE), they rely on experts to carry the tech and untangible part of it.

Financial statements give an idea of the company's business performance, its past and its near future. The intangible reveals solidity and the chances of resilience in the face of unforeseen events.

Peter Jordan

Solution delivered

Market, commercial diligence, business model assessment and recommendations for sustainable growth,
Intellectual Property due diligence, including freedom of use,
IT organization and business continuity assessment,
Cyber-security evaluation,
IT back-office review, hardware, CRM, ERP, accounting and licenses management,

Results

Many of the above items led to satisfactory results, while others required specific attention.. A set of recommendations is attached to the report.

Ultimately, the acquisition happened. The PE agreed for a 5M€ investment for 20% of the shares and a voting right on the board of governance.