A PE Firm Got the Tech Validation It Needed to Underwrite a 3x Growth Thesis. In Two Weeks.

A U.S.-focused middle-market PE firm had one question before closing on a telecom services investment:  Could the target's technology platform support a 3 to 4x increase in customers over the hold period?  If it could, the thesis held. If it couldn't, or if getting there required capital the model hadn't accounted for, the acquisition price had to reflect that. The firm needed a clear answer to a specific underwriting question, delivered before the acquisition price was set. 

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

The underwriting question

The deal thesis depended entirely on customer growth. A platform that couldn't scale to support that growth, or that required significant unplanned capital investment to get there, would change both the financial model and the acquisition price. The engagement had to be scoped around one lens: what does it take to support 3 to 4x customer growth, and what does that cost? 

What we found

The target's technology platform could support the growth thesis. It wasn't built for 3x scale out of the box, but the investment required to get there was manageable and within a range that preserved the deal economics. 

The platform's architecture had specific limitations under rapid growth scenarios, and the assessment identified where existing infrastructure could absorb load increases and where investment would be required. The distinction between what was already adequate and what needed capital allowed the deal team to finalize the acquisition price with a clear view of technology spend in the model. Deal teams can't use technical findings they can't put into a model.  

The lead deal partner cited the speed and depth of the final report as a standout in the diligence process. 

The firm needed a clear answer to a specific underwriting question, delivered before the acquisition price was set. That's what we built the engagement around.

What the deal team had before signing

We completed the full assessment within two weeks: documentation review, structured diligence sessions that surfaced assumptions and risks the documentation alone didn't reveal, and final reporting. The firm entered the transaction with a validated growth thesis, a scoped technology investment roadmap, and a clear view of technology spend in the model.

The technology roadmap starts at diligence, not after close

Getting the technology investment call right at diligence sets the conditions for execution. PortCos that enter the hold period with a clear technology roadmap tied to the value creation plan move faster and waste less capital on reactive decisions. Buy-side IT diligence done well becomes the first chapter of the 100-day plan, not a separate document that gets filed and forgotten.

Running a process and need technology diligence that answers the underwriting question before you sign?

Talk to our diligence team

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