Unlocking Value in a PE-backed Add-On Acquisition
How technology due diligence tested the synergy assumptions, cost base and integration requirements behind a buy-and-build investment thesis.
For a private equity backed platform, the value of an add-on depends on what the combined business can deliver. In this case study, an established facilities management group was pursuing a specialist maintenance coordination business as part of its acquisition strategy. Having advised on their previous add-on acquisition, we helped assess the technology assumptions and work needed to realize benefits.
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Testing the Technology Behind the Investment Thesis
The acquirer, a UK-based business, provides property management and maintenance services to commercial customers. The target coordinated specialist repairs and service maintenance for lifts, HVAC and fire-safety equipment through their central team and external suppliers. All their operations run on a proprietary coordination platform.
The investment thesis centered on connecting the target’s coordination platform with the buyer’s field-service and finance systems. A successful integration would support higher service volumes, reduce manual administration and improve visibility across the combined business. Four points needed validation:
API and integration readiness: Could robust APIs support automated data exchange between the target’s platform and the buyer’s core systems?
Platform scalability and maintenance: Could the core applications handle projected post-acquisition transaction growth and remain maintainable?
IT governance and support: Did internal personnel, vendor management and outsourcing arrangements provide reliable support, with key-person dependencies understood?
Intellectual property ownership: Did the target hold clear ownership or appropriate usage rights across its key software, platforms and proprietary tools?
The parent company needs a platform that can connect, scale and be maintained.
Understanding the Cost of Making the Deal Work
A planned increase in annual IT expenditure from £100,000 to approximately £250,000 made the cost base a central diligence question. The buyer needed to understand whether the increase reflected temporary expenses or recurring operating costs. That distinction would shape their view of the ongoing cost of running the acquired business and the team.
The review followed seven stages: kick-off, preparation, research, management sessions, analysis, reporting and next steps. Its "Complete" scope combined management access with detailed architectural evaluation, covering product strategy, team structure, infrastructure, DevOps, security and the data flows between business systems.
Translating Findings into a Value Creation Plan
The findings gave the deal team a practical basis for discussing technology risk, integration priorities and transaction terms. Risks and value creation opportunities were ranked by business impact and cost, helping distinguish the issues most material to the investment thesis.
The improvement roadmap then mapped activities to pre-completion priorities, earn-out tracking and the first 100 days after acquisition. Briefings brought the evidence to investment managers and decision-makers, connecting the technical assessment to the work needed after ownership changed.
For the sponsor and platform management team, this provided a basis for planning integration and allocating resources. It also made clear which technology dependencies needed attention before the intended operating benefits could be delivered.
In a PE-backed buy-and-build strategy, technology diligence helps test how an add-on will contribute to the wider platform. Its value lies in making the synergy assumptions, cost of change and execution requirements explicit so the investment decision and the post-close plan rest on the same evidence.
Planning an Add-on Acquisition?
Before committing, understand whether the target’s systems can support your plans and what integration will cost. Intium’s technology due diligence examines the software, team and suppliers you would inherit, helping you identify work and spending that need to be included in the deal plan.
Contact us to discuss your next acquisition.
