IT Spend at Scale Can Break a Model. A Global PE Firm Got Clarity on Both Before Closing.

A global private equity firm was evaluating a $600M revenue automotive services provider. At that scale, the gap between what an IT environment costs to run and what it costs to run well post-acquisition is large enough to move the model. The deal team needed to know what they were buying before they priced it. 

This work was performed by Liberty Advisor Group, now a Resultant company. 

Two weeks to assess a full IT cost footprint

The target was privately held. The deal team needed a comprehensive assessment covering the full IT cost footprint: infrastructure, applications, security posture, organizational structure, IT spending, and back-office operations. They also needed it inside a compressed diligence window of two weeks. 

Automotive services businesses have specific operational and competitive dynamics that shape how IT environments are built and where the gaps tend to sit. A generic diligence framework applied to this target misses risks a sector-experienced team catches. 

What we found

The target's IT environment was functional but carried the characteristics common to privately held businesses that have grown without a centralized technology strategy: application sprawl, underinvestment in security, and IT spending that wasn't well-documented or consistently governed.  

None of those findings were disqualifying. But each carried a post-close cost, and the deal team needed a defensible number to work with, not a list of risks without price tags. 

The team included an advisor with direct experience at a competitor of the target. That context shaped which findings warranted the most attention. 

From technical findings to model inputs 

We completed pre-work, a full-day on-site session with the target's leadership and IT teams, and final reporting within two weeks. The on-site time focused on the areas that carried the most risk and the most ambiguity, closing the gaps that documentation alone couldn’t. 

The findings were translated into investment estimates and risk assessments the deal team could incorporate directly into their model: what does this IT environment cost going forward, and what does it cost if you don't invest? The assessment answered both. 

After the deal closed, the acquisition target implemented several of our organizational and strategic IT recommendations. When a target acts on diligence findings post-close, it's a signal that the work was grounded in operational reality rather than produced for the data room. 

What standard diligence frameworks miss at $600M 

At this scale, standard diligence frameworks leave gaps that cost more to discover after close, and the financial implications of getting it wrong are proportionally larger. What separates useful diligence from performative diligence is whether the findings connect to the model and whether the recommendations survive contact with the business after close. 

Evaluating a complex acquisition and need IT diligence that connects to deal economics? 

Talk to our diligence team

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