Technology Due Diligence for A&D M&A: What You Need to Know
Technology is central to aerospace and defense businesses, even when a company does not perceive itself as a tech company. In aerospace and defense M&A tech due diligence is more than just good business. It may also be a matter of national security. The aerospace and defense sector is increasingly the target of cyber criminals, with airlines facing the most significant attacks. Technology due diligence can protect the newly formed entity against these attacks, ensure full ownership of valuable intellectual property, and make the case for the sale price when a company owns valuable digital properties. Working with a skilled A&D investment banking firm can help your company effortlessly navigate due diligence. Prepare for the process by asking these questions.
Is all of our software in compliance?
It’s common for companies to retain unlicensed software, to use the same access code for various programs across computers, or to use products from developers who might not have had full usage rights to the software they used. Conduct a thorough licensing check on all software you use, and retain that information in a single location for easy reference.
Who owns our intellectual property?
If you have valuable intellectual property—whether it’s a brand trademark, in-house software, or even a popular blog—it is critical to know who owns it. Did oyu outsource some of the work to a contractor? What about component parts, such as digital images or lines of code? Every A&D company needs airtight intellectual property agreements before moving toward a merger or acquisition. Don’t just use something you find online. A good intellectual property lawyer is key here, especially if you have highly valuable IP.
Are there ongoing technological issues or glitches?
If part of what you’re selling is technology—and it almost always is—then you must make sure that all of your technology works flawlessly. Too often, companies treat glitches like a missing step—something to just step over and learn to ignore. A buyer won’t ignore these issues, and may change their assessment of your business if you don’t fix them. Consider how easy your software, computers, and other technological properties are to use, and make any necessary changes now.
What have we done to protect our company?
How is your cyber security infrastructure? Have you audited for potential problems? Are there easy opportunities for hackers, or employees who will easily fall for phishing scams? A secure company is a valuable one, with significantly less exposure. Consider bringing in a cuber security firm to audit your operations and correct any shortcomings before a buyer discovers them.
What specific technological aspects of our company lend additional value to this deal?
Every deal is unique. Understanding the unique value proposition of your own company is key to attracting the right buyer and seeing the deal through to completion. What specific technological assets matter most? Identify these early in the process, then ensure all is as it seems—from licensing to ownership contracts.