IT Due Diligence Gap Cost Acquirer £1.1M After Nine-Day Warning Before Deal Close
A UK company that acquired an 80-staff distributor in 2024 discovered critical IT liabilities only after the deal closed, having been informed just nine days before completion. Key problems included a non-transferable order system licence worth £190,000 to replace, a server hosted in the seller's building costing £14,000 a month for 14 months, and email accounts still accessible by the seller's IT team. A critical customer order integration had been built by an unreachable contractor in 2018, compounding the integration challenges. The acquisition's projected £900,000 in synergies was modelled with zero integration costs, yet the company has since spent approximately £1.1 million over two years and still operates duplicate systems. In response, the finance director and IT lead created a two-page technology due diligence checklist, which advisers now request alongside standard financial and legal reviews.
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