Tech DNA recently published a whitepaper titled “Top 9 Risks for Global Fortune 500 Companies to Avoid When Buying a Technology Company.” We created this document because non-technology companies (non-tech acquirers) are buying technology companies at an increasing rate. In fact, last year non-technology acquirers bought more technology companies than did their technology company counterparts.
The challenge is that non-tech acquirers are often unprepared to assess the technology risks that come with technology company acquisitions and can make multimillion- and multibillion-dollar mistakes. The mistakes include buying the wrong company, overpaying or an inability to execute on post-acquisition plans.
We have assessed more than 100 technology companies since Tech DNA was founded in 2009. In any given three-year period, we have seen roughly 10 percent of deals fall through because of the technology risks uncovered by technology due diligence.
The key takeaway is that as more and more non-technology companies are buying technology companies, the risks are significant and they can be identified and mitigated.