Tech & IT M&A Playbook

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A chapter-by-chapter guide to technology across the deal lifecycle: tech due diligence, deal structuring, Day-1 readiness and transition service agreements (TSAs), integration and separation, ERP, and post-deal value creation.

01Pre-deal and tech due diligence

  1. The role of technology in value creation (and destruction) in M&A7 min
  2. How tech due diligence really drives investment outcomes9 min
  3. Buy-side vs sell-side tech due diligence: different objectives, different truths7 min
  4. What good looks like in IT due diligence8 min
  5. Tech DD in PE deals vs corporate deals12 min
  6. Speed vs depth: trade-offs in fast-cycle due diligence10 min
  7. Red flags that kill deals (or should)10 min
  8. Assessing the IT organization: skills, structure, and key-person risk8 min
  9. Application landscape due diligence: complexity, technical debt, and fit7 min
  10. Infrastructure and cloud due diligence: scalability, cost, and risk9 min
  11. Cybersecurity due diligence: what matters before it is too late11 min
  12. Data, analytics, and reporting due diligence11 min
  13. ERP due diligence: when the core system is the deal10 min
  14. IT contracts, licenses, and vendor lock-in risks12 min
  15. IT cost structure and budget due diligence11 min
  16. Identifying separation and integration complexity during DD10 min
  17. How AI is changing tech due diligence14 min
  18. Using AI to accelerate application and codebase analysis15 min
  19. AI for cyber, data, and risk detection in deals15 min
  20. Limits and risks of AI-driven due diligence14 min

02Deal structuring and pre-close planning

  1. Translating tech due diligence findings into the investment thesis8 min
  2. From findings to actions: building the tech workplan pre-close11 min
  3. TSA strategy: why most deals get it wrong12 min
  4. Estimating true one-time vs run-rate IT costs11 min
  5. Separation vs integration: making the right call early11 min
  6. Tech implications of carve-out vs full acquisition deals10 min

03Day-1 readiness and transition services

  1. What Day-1 really means for IT7 min
  2. Day-1 readiness: systems, people, and data10 min
  3. Designing and negotiating TSAs that actually work11 min
  4. Managing TSA dependencies and exit risks14 min
  5. Governance and decision rights during TSA periods11 min
  6. Common Day-1 failures and how to avoid them10 min

04Post-deal integration and separation execution

  1. IT program management in carve-outs and PMIs8 min
  2. Operating model choices for post-deal ITPlanned
  3. Application separation vs replacement strategiesPlanned
  4. Data migration: risks, trade-offs, and best practicesPlanned
  5. Identity, access, and security in separationsPlanned
  6. Infrastructure stand-up and cutover planningPlanned

05ERP and core systems transformation

  1. ERP as a value lever in M&A12 min
  2. One ERP or multiple? Post-deal ERP strategy choices15 min
  3. SAP in M&A: common scenarios and pitfalls14 min
  4. Microsoft Dynamics 365 in carve-outs and PMIs14 min
  5. ERP for manufacturing-heavy businesses14 min
  6. Payroll and HR systems in global separations14 min
  7. Procurement and supply chain system integration13 min
  8. Timing ERP transformations: Day-1, Day-100, or later?15 min

06IT transformation and value creation

  1. IT cost reduction after the deal: what actually worksPlanned
  2. FTE rationalization without breaking the businessPlanned
  3. Capturing IT synergies: myths vs realityPlanned
  4. Application rationalization as a value leverPlanned
  5. Cloud migration in post-deal environmentsPlanned
  6. Modern architecture as a competitive advantagePlanned
  7. Tech-enabled EBITDA expansionPlanned

07Advanced topics and long-term value

  1. AI as a post-deal value creation leverPlanned
  2. Data platforms and analytics post-acquisitionPlanned
  3. Cybersecurity as a board-level issue after closePlanned
  4. Building a scalable IT function for PE hold periodsPlanned
  5. When to invest vs when to stabilizePlanned
  6. Measuring IT value creation over the hold periodPlanned
  7. Lessons learned from failed (and successful) tech M&A integrationsPlanned

Common questions

What does good IT due diligence look like?
Good IT due diligence answers five deal questions with evidence: what gates the value in the model, what must not break on Day-1, what one-time cash is mandatory, what the true run-rate IT cost is, and who will execute the first 100 days. Read the chapter
What is the difference between buy-side and sell-side tech due diligence?
Buy-side tech due diligence is underwriting: it tests price and structure, the timing of value, and the Day-1 design the buyer will own. Sell-side diligence de-risks the sale process by surfacing issues early. It can narrow and speed up a buyer's work, but it cannot replace the buyer's judgment. Read the chapter
What are the red flags in technology due diligence?
A technology red flag is deal-killing when it threatens continuity, sets the clock for value levers, or creates mandatory cash the model cannot absorb. Examples: security that cannot support connectivity, end-of-life core systems, fragile operations, opaque IT costs, key-person dependency, data exposure, and unclear IP ownership. Read the chapter
Can AI be used in tech due diligence?
Yes, for first-pass work such as classifying applications, extracting contract clauses, and triaging code repositories. AI output is a way to process evidence, not evidence. Any finding that could change price, terms, Day-1 readiness, or TSA duration must be traceable to evidence and reviewed by a human owner. Read the chapter
What is the difference between one-time and run-rate IT costs?
One-time IT cost is finite work to stand up, separate, migrate, remediate, or retire technology. Run-rate cost is the recurring people, contracts, licenses, hosting, support, and control work required after the program ends. If the work, invoice, or role recurs after the program ends, it is run-rate. Read the chapter
What is a TSA in M&A?
A Transition Service Agreement (TSA) is a temporary operating model in which the seller keeps providing services after close. It has a price, a dependency graph, and an exit test. Choose the minimum temporary support that protects continuity, then contract the work and rights required to leave it. Read the chapter
When should a buyer exit a TSA?
A buyer should end each TSA service only when it can own the business outcome, operate the dependency chain, and show the seller can be removed without delaying the value plan. Exit is decided through evidence-based gates covering boundary, capability, transactions, operations, and decommissioning, with services released in waves. Read the chapter
What does Day-1 mean for IT in an M&A deal?
Day-1 is the first day the business must operate under new ownership, and it is separate from any system go-live. For IT, four outcomes must hold: people and service accounts have access, transactions run end to end, data boundaries are clear enough to operate and report, and someone can support and secure the environment. Read the chapter
Should you consolidate to one ERP after a merger or acquisition?
Only when standard process is directly tied to deal value and the business can absorb the change. Multiple ERPs can work when business units have distinct operating models, provided reporting definitions, master data, and controls are common. Often the best answer is staged: standardize data and controls first, then migrate where the value case is proven. Read the chapter
When should ERP transformation happen after an acquisition?
Day-1 is for continuity: only ERP changes needed to transact, pay employees, ship, invoice, and close belong there. The first 100 days are for changes that release near-term value or exit a short TSA. Changes that redesign the operating model or replace the platform come later, with funding and a decision date. Read the chapter