What is meant by merger & acquisitions?
The term M&A describes the merger of two companies. If this takes place through a merger or amalgamation, this process is referred to as a merger. If, on the other hand, shares of a company or a company as a whole are purchased, this purchase is called an acquisition. The IT sector plays an important role in this process.M&A IT: The right preparation with due diligence
When purchasing a company, due diligence involves a precise examination and evaluation of the target company, taking into account its financial, legal, tax and economic status. The IT due diligence Provides information on strategic, operational and financial IT opportunities and risks, which flow into the purchase decision, price negotiations and subsequent post-merger integration.
By analyzing the IT of the target company, also called target, and creating it business plans, we can make reliable statements about the IT status and possible restructuring scenarios at an early stage.
Software and technology are increasingly playing a major role in the M&A environment. Decision-makers are often faced with the challenge of finding the right technology for their use case.
digatus has many years of experience in advising and evaluating technology- or software-heavy transactions. We carry out the software due diligence with the help of our partner Cape Of Good Code. Learn more about Technology & Software Due Diligence.
Determining the actual state: Optimization of Contract & License Management
For cost-efficient IT, optimization of contract and license management is essential. Even before the carve-out (spin-off), we provide support for IT-related issues around the Sale and Purchase Agreement (SPA) and the Transitional Service Agreement (TSA). In our opinion, TSA and SPA consulting are particularly important because they define the contractual framework for ensuring the continued operation of IT. In addition, it regulates which hardware and software will be transferred.
An initial analysis, categorization and evaluation of the existing contracts provides an overall view of costs, contract terms and contract types within a very short time during the carve-out.
The current situation determined serves as the basis for the individual concept proposal and subsequent implementation with the customer.
Cost synergies can be exploited with license model adjustments and harmonization as well as the use of bundling effects. Frequently, an initial analysis additionally reveals potential for “downscaling” – i.e., service level, maintenance, and license contracts that are no longer needed or oversized are terminated.
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Separation of the IT division with the help of the carve-out
Whether carve-out or standalone projects – the carve-out of a division is a complex process for both the selling and the receiving side.
This process includes legal, contractual, procedural as well as financial aspects. Throughout the entire transaction process, the uninterrupted business activity of the target must be ensured. We take over the conception of the spin-off or separation of entire IT architectures of parts of the company with active change management for processes and organizations.
A quick independence of the target thereby creates the prerequisite for process and cost optimizations and at the same time offers the possibility of aligning the IT with the long-term corporate strategy.
The correct integration of IT processes within IT M&A
For the implementation of the synergy effects determined in the business case, professional advice and implementation with regard to the necessary activities within the post-merger integration are often missing (PMI). The integration of IT organizations and processes into the existing structures is essential here.
At the same time, technologies are consolidated according to the “best of both” approach in order to use the technological strengths of both units. We make sure that the entire IT, including ERP systems, applications and IT infrastructure are considered . For an integration process that is as efficient and smooth as possible, we also rely on the implementation of training courses and clear communication with all stakeholders.
