Identify software risks during M&A transactions
When software is part of the deal, knowing what’s in the code matters. Understanding potential open source risks, security flaws, and code quality issues in a target’s codebase early protects the value of the deal. Undetected issues during M&A can:
- Compromise proprietary intellectual property.
- Put sensitive data at risk.
- Impede overall and integration operations.
- Lengthen deal and integration timelines.
- Increase remediation costs.
No matter which side of an acquisition you’re on, Black Duck solutions for open source license compliance, software security, and code quality will support the financial and reputational success of your transaction.
Did you know?
Black Duck® Audits of thousands of M&A deals reveal the potential risks associated with acquiring software:
100%
codebases contain open source
86%
of codebases have license conflicts
99%
of codebases have at least one vulnerability
98.3%
contained open source more than four years out-of-date
Questions?
Call the audit hotline +1 781.425.4444 or fill out the form below.
Audit services for M&A
Black Duck Audits can identify and assess all open source and third-party components, licenses, and vulnerabilities in the target codebase with these audit scenarios:
When acquiring a company, it’s crucial to know if the target’s capabilities, technology, and software can support the investment thesis, roadmap, and plans to scale business. Not every private equity firm has in-house expertise to confidently perform that evaluation.
Black Duck acts as a technical advisor to private equity firms and their portfolio companies seeking to identify preclose issues and affirm plans before clients proceed with investments. We work alongside strategic advisors and in-house value creation teams. And we have the broad experience to take on the entirety of software due diligence.
Acquiring companies tend to have expertise in-house and a playbook for technical due diligence. However, they tend to focus on the target’s software development processes and organization. After all, there is only so much information an acquirer can get without getting their hands on the code, which remains proprietary until the deal is finalized. And where the rubber meets the road is in the code.
Black Duck partners with in-house diligence teams and acts as a trusted third party to audit the code and identify risks and technical debt associated with code quality, architecture, application security, and third-party code. With Black Duck in the mix, the target is comfortable that its IP is protected, and strategic acquirers get a complete picture of the technology it’s buying.
When preparing to sell your company or technology, it’s important to realize the questions most acquirers will be trying to answer during technical due diligence process before moving forward with the deal. Forewarned is forearmed.
The best way to prevent this process from delaying or souring a deal is for the seller to have solid understanding of where your organization stands in the eyes of a typical acquirer. Black Duck has advised acquirers on software due diligence in thousands of transactions. Our team can identify what might be red or yellow flags for a typical acquirer, enabling you to get your business in order before a transaction, and sleep better the night before diligence starts.
Ensure software is an asset, not a liability
Whether you are positioning to be acquired, evaluating potential targets for a strategic purchase, or seeking to establish a benchmark valuation of digital properties, having full insight into the composition and integrity of software assets is critical to a successful merger or acquisition.
451 Research discusses managing the threat of open source in M&A
Learn more about Black Duck Audits
How an open source software audit works
Understand the process of an open source audit—what comes before, during, and after.
Read the blog post
A Comprehensive Approach to Software Audits
Learn how to address license conflicts, security vulnerabilities, quality issues, and maintainability concerns.
Download the eBook
Legal Specialist Certification Course
In this course you’ll gain skills to assist client companies in efficiently and effectively navigating and interpreting the output of a Black Duck analysis.
Learn more
Software Due Diligence Checklist
Learn the steps Black Duck recommends you take for open source due diligence in an M&A transaction.
Get the checklistCertification Directory
Access the directory of legal professionals who have been certified as Black Duck Legal Specialists.
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