Due diligence is a fundamental stage in every M&A
transaction and lays the foundation on which a deal is built.
However, with so much material to review, companies sometimes
don't pay enough attention to information technology
(IT). Not only is this risky from a legal
perspective, but it can also negatively impact business success.
According to research conducted by Ernst and Young (report
available here), nearly half of dealmakers surveyed
admitted that more detailed IT due diligence could have reduced the
amount of lost value in an M&A transaction.
One of the issues is that IT may not always appear to be a
significant component of the deal. However, IT systems are usually
quietly operating in the background of virtually every major
business across industry groups, not just today's modern
technology companies. For example, a manufacturing company may
simultaneously use enterprise resource planning
(ERP) software to bind together critical business
functions (like
