A PE firm’s potential acquisition of enterprise software vendor was under LOI. They had a short window to complete due diligence but lacked the software expertise to adequately vet the product, market and financial model.
BP took an all-hands-on-deck approach, with three teams for financial, product, and market diligence. The financial diligence included quality of earnings review, comparable analysis and customer and vendor contract analysis. The product diligence included product roadmap review, architecture assessment, R&D talent and leadership review, development plan review and risk analysis and mitigation plan. The market diligence included customer and non-customer calls, partner validation and primary and secondary competitive analysis.
BP identified key risk areas related to product integration, pricing and emerging competition. PE client determined that risks outweighed rewards and did not close.
“The team at Bulger provided incredible insight and analysis in a very tight time window and saved us from a potentially disastrous deal” –PE Managing Partner