How Sonar Improves Diligence Quality- A Consultant's View
Intium's seasoned consultant Hanno Liiva guided a client in their deal using Sonar - Intium's fully automated and data-driven diligence reporting tool. I invited Hanno for a quick chat over coffee to give us his first impressions of Sonar and insight into how it helped him in his consultant role.
Hanno has over 20 years of experience in management roles in both large corporations and startups. In his career, he has successfully ushered many clients through due diligence projects but has never before used software to help him in this task.
Hanno, can you please tell me more about the client who you were consulting and the deal itself?
Hanno: The client was a European company providing technology solutions in the commercial transportation industry. They needed help with conducting a technology due diligence for a potential acquisition target. It was a pretty typical client-base acquisition, where it’s important to assess integrability options to tap into the target client base and support customer transition to the acquirer. Essentially our client had a strategic focus in this deal and they needed our help to understand if their goals were achievable and under what circumstances.
What was the key thesis of the due diligence for your client? What was the most important question you had to answer?
Hanno: The paramount questions were centered around the target clients and technology, specifically the ability to integrate. As our client was acquiring the target’s client base, they needed us to give them a clear understanding of whether the platform allows integrations and also assess the IP and data rights, e.g. who owned all the data and where/how it is stored. On top of that our diligence also provided input to other streams such as the legal diligence on the count of our open source analysis. This became a true cornerstone of the whole evaluation process.
You have conducted tech due diligence exercises before but this was the first time you used any kind of supporting software. Please tell me what were your first impressions about using Sonar.
Hanno: The biggest difference is in the process itself. Usually, when running a tech due diligence, I start with looking at the materials and preparing the questions. After the face-to-face meetings, I start writing the report itself. Consultants usually structure their reports depending on the specifications of the current deal and then start analyzing and filling the structure with relevant content.
With Sonar, the process is quicker and easier. I do not have to do anything by hand. I just set the parameters and details of the project in Sonar and the structure of the deal is set automatically. When all information is added to Sonar, the report will be generated automatically. Sonar structures the whole process very well and makes it easy to understand, and complete. There are many different areas we cover in a tech due diligence with numerous risks and opportunities involved, and Sonar helps to keep me on track and to make sure no risk or opportunity is unaccounted for. It helps me to be sure that all relevant areas and questions are covered and that the client gets a clear picture of the effort needed to close the capability gap of the target and reach their investment goal. With Sonar I always have a checklist in front of me and I can really focus on the most important questions to keep a strategic view.
Another very important feature of Sonar is the data from all previous deals done in Sonar. The cool thing is that it’s pivotable. What this essentially means for the consultant is that in Sonar it is very easy to benchmark different indicators and we have actual market data to base these benchmarks on. As a consultant, I have not had this information accessible to me before as I only have data from the deals I have been part of.
You have 20+ years of experience with different positions in both small and large companies and extensive business knowledge and experience. Why did you choose to go for IT due diligence?
Hanno: I made that decision for a couple of reasons. Firstly, by running tech due diligence on deals, I can broaden my perspective since I see many different companies and businesses all over the world. So as a consultant, I get a very detailed understanding of how businesses operate in different cultures, geographies, and circumstances. Otherwise, I would never be able to see into a company on such an intimate level.
Secondly, the whole area of M&A and technology acquisitions is very dynamic and of much interest to me. I get very enthusiastic when I get to step into the shoes of our clients and see the world through their eyes. I’m always rooting for our clients and their success and it gives me great joy when my input is useful and helpful, and the deal concludes successfully. After all, we have to keep in mind that when the deal reaches us - the consultants - already countless people have put years of work into the prospect. When a deal finally concludes, it is a big reward for all people and parties involved and we are happy to share that enthusiasm and excitement.
About Intium Tech
Intium is a technology due diligence and value creation services provider. We work with private equity investors, portfolio, and public companies helping assess software and tech-enabled M&A targets. We are revamping this business to be data-driven and software-powered! We help you with buy-side tech diligence, sell-side vendor due diligence, and value creation solutions.