Software due diligence

Despite the crucial role played by software, it is often investigated only superficially during a merger or acquisition process. Even though we have seen an enormous acceleration in digitalisation and growth in investment in Tech companies in the last 5 years. Tech deals represent 31% of all buyouts and an even higher percentage if you include deals where software is business-critical for value creation.

This comes with great risks; software failures that result in a huge loss of revenue, productivity and reputation. And insufficient software investigation is not only unwise but also completely unnecessary. What's more, thanks to our due diligence insights your risks will become opportunities.

Are you considering a merger or acquisition? If so, you will want to know what you’re investing in.

• Is the intended software scalable?
• Can the software be easily integrated with the software of the ‘platformcompany' X?
• What about the intellectual property? Does the target company fully own it or is this being complicated by open source software and third-party dependencies?
• Is the software reliable, adaptable and expandable? Or is it end-of-life and needs to be replaced shortly?
• Is the software secure at all and, for example, compliant with GDPR?
• Which competences and knowledge does the development team have? And how attractive is it technically for developers?
• What is needed to make the software future-proof after integration?

In other words, does the software stand in the way of your strategy or does it offer great opportunities?

YieldDD answers all these questions. We provide insight, we interpret, we leave no stone unturned and eliminate unnecessary software risks in mergers and acquisitions. You will receive an independent, unbiased overview of risks, opportunities and subsequent steps.

Read below which components we investigate and how.

When we carry out a due diligence investigation, this includes various steps. No rush jobs, no cursory analysis. We investigate every line of code, architecture, software process and development team. Measuring the software quality is based on ISO standards and benchmarks, using specialist, high-end tooling. With which we also extensively test the security.

Based on your plans and wishes, we determine the design and extent of the investigation. All in close consultation, taking time constraints and deadlines into account, as well as the possibilities to be transparent and to share the source code. Our services are modular so that subsequent steps are always a possibility. In the end, it is all about customization. The investigation depends entirely on the investigation questions.

Do you have a limited budget? Is it a relatively small acquisition? Or is there only a certain amount of time to make a decision? If so, you have the option of only the first phase of our investigation: a highlight report. In this phase we investigate the development team, the technology stack and various development processes. It gives you a good first impression of the possibilities after the acquisition.

If you would like the complete picture of all risks, opportunities and possible next steps, we recommend you to go one step further and go for the complete software due diligence investigation.

• Code assessment
  • IP
  • Technical debt
  • Scalability
• Security assessment
  • Code-guided security assessment
  • Penetration test
  • Cloud configuration assessment
• Valuation
• SaaS assessment
• Team assessment

Together we will determine which components are needed for the deal, and for the strategy you have in mind.

Every software due diligence process is tailored. Only after we have coordinated the design and components of the process, do we get to work. In a way that suits both us and the client, using a fixed process:

It’s important to know that it is teamwork. A dedicated team will work together with you, as client, on the process. Geared to the demand, this team always includes a project manager, there for all your questions or input. This process and data are complementary to your other due diligence processes.

Upon completion of this process, we provide you with an independent and unbiased overview of benchmarks, risks, opportunities and subsequent steps. You see how you are doing in relation to the market, compared to the norm. Beyond analysis and insight. We offer interpretation and advice about your challenges, use cases and research issues. The report always provides leads for the future.

You don’t need to have any technical knowledge because we translate all our findings for you in such a way that you know what you are investing in or what you are selling. The findings are presented in a concise and clear manner and explained in detail. Besides a clear report, we also provide a personal debriefing. 

In short, thanks to our software due diligence insights your risks will become opportunities. We leave no stone unturned and reveal your digital future. This gives you a stronger negotiating position, a better valuation, it prevents hidden defects or unpleasant surprises, and leads to more successful mergers and acquisitions, and to profitable investments.