chapter  9
6 Pages

IT and Mergers and Acquisitions (M&A) Activities

ByTiffany Pham, David K. Pham, Andrew T. Pham, Mitchell Fox, Larry Rothstein, Michael Weiner, Emily Simoness, Kiran Rijhsinghani

This chapter introduces the importance of taking Information Technology (IT) into account on in the Mergers and Acquisitions (M&A) process. IT is often considered an afterthought and not a strategic component of an organization's business strategy, numerous companies make the grave mistake of overlooking IT when they decide whether or not to merge with or acquire another organization. IT should even be part of the preliminary discussions as much as possible, as noted in the following evaluation process: preliminary discussions, candidate evaluation, due diligence, strategic alignment and system integration opportunities, and recommendation by IT executive management, board review, and final decision. When IT conducts due diligence, in addition to other criteria, it should base its evaluation on the different layers of the enterprise architecture. However, it is important to realize that knowing the other party's technology situation may have an impact not only on the price of the M&A valuation, but also how successful the system integration will be.