IT Due Diligence for Private Equity

Private equity investors rely on IT due diligence to uncover technology risk, validate operating assumptions, and identify value-creation opportunities before capital is deployed. DealTech Advisors provides specialized IT due diligence for private equity firms across platform acquisitions, add-ons, and carve-outs—combining deep technical analysis with practical execution insight.

Our private equity IT advisory approach goes beyond checklists. We translate technology findings into deal-relevant implications that directly support valuation, integration planning, and exit readiness.

ffective post-close execution starts with disciplined IT due diligence for private equity, which identifies the risks, costs, and integration complexity that shape Day One and 100-day priorities

What Is IT Due Diligence?

IT due diligence evaluates a target company’s applications, infrastructure, cybersecurity, data, and operating model to determine whether technology can support the investment thesis.

Key objectives include:

• Identify material IT risks
• Validate current and future IT costs
• Assess scalability and technical debt
• Highlight value-creation opportunities

Why IT Due Diligence Matters in Private Equity

Private equity transactions move fast. Without rigorous technology diligence, investors risk inheriting:

• Unsupported legacy systems
• Hidden cybersecurity exposure
• Underestimated integration costs
• Platforms that cannot scale

Effective IT due diligence protects downside and informs upside.

What We Assess During IT Due Diligence

DealTech Advisors evaluates the full technology landscape to identify material risk, validate operating assumptions, and surface value-creation opportunities. Our assessments focus on the areas that most directly impact valuation, integration complexity, and post-close execution.

Applications & Architecture

We assess the maturity, fit-for-purpose alignment, and scalability of core business applications that support revenue, operations, and financial reporting.

Focus areas include:

• ERP, CRM, manufacturing, and industry-specific platforms
• Custom vs. off-the-shelf applications
• Redundant, overlapping, or end-of-life systems
• Integration dependencies and architectural complexity

Why this matters for your deal:

Our application and architecture assessment clarifies whether core systems will require near-term replacement, what modernization will cost, and how technology may constrain growth or add-on integration—allowing investors to underwrite platform scalability with confidence.

Infrastructure & Cloud Readiness

We evaluate whether infrastructure can support business growth, security requirements, and future modernization.

Focus areas include:

• On-prem vs. cloud footprint
• Network, servers, storage, and virtualization
• Capacity, performance, and resiliency
• Disaster recovery and business continuity

Why this matters for your deal:

This will provide an understanding of any potential capital investments that need to be made in hardware or software that are required to support the business. It also provides a clearer picture of the true operating costs required to run the business.

Cybersecurity & Compliance

Focus areas include:

• Security governance and policies
• Identity and access management
• Endpoint, network, and application security
• Incident response and monitoring
• Industry and regulatory compliance posture

Why does this matter to you?

More than half of middle market companies have experienced a cybersecurity threat. Security issues can compromise personal data, business data and result in significant downtime for the company. You need to understand the magnitude of any potential security risks.

Data, Reporting & Analytics

We evaluate how data is captured, governed, and used to support decision-making.

Focus areas include:

• Data quality and consistency
• Reporting architecture and tools
• Manual vs. automated reporting
• Single source of truth availability

Why is this important?

The quality and accuracy of the data are a requirement for operating and understanding the business. Also, the speed and ease at which data can be retrieved is critical for making key decisions about the health of the enterprise.

IT Operating Model

We assess how IT is organized, funded, and governed.

Focus areas include:

• IT org structure and skill coverage
• Internal vs. outsourced services
• Vendor and contract landscape
• Budgeting, roadmap, and governance processes

Why is this important?

Critical systems need to be supported. You need to know that all critical systems can be supported either with existing staff or a vendor relationship. You also need to understand where the key knowledge gaps are and determine how to fill those.

Carve-Out & Separation Complexity (When Applicable)

Carve-outs introduce additional complexity that must be understood early.

Focus areas include:

• Shared systems and services
• Data separation requirements
• Standalone infrastructure needs
• Transitional service dependencies

What this tells you:

Carve-outs can be challenging, and you need to understand exactly what is required in a transition services agreement (TSA). If you don’t know all the systems that are required to support the business, you will be scrambling on Day 1 to fix the problems.

Integration & Scalability Readiness

We evaluate how well the platform can absorb add-ons and scale.

Focus areas include:

• Integration patterns and tooling
• Standardization opportunities
• Technical debt accumulation
• Automation potential

Why is this important to you?

Understanding the technical landscape and its limitations will give you a more realistic picture of the effort required to integrate the business and set it up for growth.

These assessment areas form the foundation of our diligence. We apply a consistent, execution-oriented approach to translate findings into clear, prioritized actions.

Our IT Due Diligence Approach

DealTech Advisors delivers technology due diligence that is practical, execution-oriented, and tightly aligned to private equity investment decision-making. Our approach focuses on translating technical findings into clear implications for valuation, integration, and value creation. See also the IT Due Diligence Checklist.

1. Rapid Discovery

We conduct targeted management interviews, document reviews, and data collection to build an initial view of the technology landscape.

2. Deal-Driven Scoping

We tailor diligence scope based on transaction type (platform, add-on, carve-out) and investment thesis to focus effort on the risks that matter most.

3. Rapid, Hands-On Assessment

We combine document review, management interviews, and technical walkthroughs to quickly develop a fact-based view of the technology environment.

4. Risk Quantification & Prioritization

Findings are categorized by severity, likelihood, and financial impact—allowing investors to distinguish critical issues from manageable improvements.

5. Value Creation Identification

Beyond risk, we identify technology initiatives that can improve EBITDA, accelerate growth, or enable operational scale.

6. Actionable Deliverables

We provide concise outputs that PE teams can immediately use in IC materials, purchase agreement negotiations, and post-close planning.

IT Due Diligence at LOI vs Pre-Close

At LOI

• High-level risk screening
• Cost baseline
• Red flags

Pre-Close

• Deep-dive technical validation
• Integration and separation planning
• TSA input

IT Due Diligence for Carve-Outs

Carve-outs introduce additional complexity:

• Shared systems
• Data separation
• Standalone infrastructure

We assess separation feasibility, timing, and cost to ensure Day One readiness.

From Diligence to Value Creation

Findings are translated into a 100-day execution roadmap that includes:

• Priority remediation initiatives
• Integration sequencing
• Value-creation use cases

Why DealTech Advisors

• Former operating leaders
• Deep PE transaction experience
• Practical, execution-focused deliverables

Related Insights

• Initial Steps in Due Diligence for an Acquisition
• The Role of IT Due Diligence in Maximizing Private Equity ROI
• 5 Critical IT Actions for a Successful Carve-Out

IT due diligence findings are only valuable if they are translated into execution. Learn how DealTech Advisors supports private equity firms through post-close IT integration and value creation.