The Inside Scoop on Tech M&A

About the Episode

In this episode, we discuss tech M&A with Barr Blanton, CEO of Crosslake Technologies, who specializes in technology mergers and acquisitions and advises private equity firms on buying, building, and transforming technology companies. If you own a tech company or invest in technology companies, this show will be of interest to you.

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In this Episode

4:20 Is there a universal perspective to viewing technology companies as an investment?
6:45 How subjective is strategy for tech companies?
8:45 What does tech due diligence consist of?
11:00 What does a typical tech due diligence team consist of?
12:00 To what extent does the tech due diligence team interact with the other teams?
13:30 What frameworks do you use when conducting due diligence for technology companies?
14:45 What is more important – industry expertise or specific product knowledge?
15:35 How can the tech stack relate to business outcomes?
17:25 Should an investor invest in tech companies if they don’t understand technology?
19:50 Do most PE firms specialize in one industry?
20:45 What’s your advice to PE firms to develop their competitive advantage?
23:05 What are you looking for when conducting tech due diligence?
25:30 What is the role of governance in technology companies?
29:15 How does corporate governance tie into value creation?
30:30 How do you tie in due diligence and integration?
32:45 How long does tech integration typically take?
33:50 Is access to technology ever an issue when conducting due diligence?
34:30 What do you do if you only have one day to conduct due diligence?
35:00 What relevance do virtual data rooms (VDRs) play in due diligence?
36:45 Do you normally conduct a code audit?
37:50 How much of tech due diligence is looking for problems as opposed to looking for opportunities?
38:50 How do you think due diligence will evolve over the next few years?
39:55 How do you prepare for tech due diligence?
41:20 What is the difference between tech and tech-enabled businesses?

Highlights

  • There is no such thing as perfect technology. The goal of technology is to accomplish the firm’s strategic objectives.
  • More than $1 trillion has been invested in tech companies in 2021.
  • Technology is an enabler of strategy – it should not drive strategy.
  • Always start by asking yourself what the role of your technology is in accomplishing your company’s objectives.
  • Technology is synonymous with disruptive innovation.
  • There are two types of tech companies – pure-play software businesses (SAAS) tech-enabled companies, and enterprise systems-driven systems (with purchased software).
  • If you don’t know about tech, you better start knowing about it. Technology is playing an ever-present role in nearly every company.
  • Technology used to be a vertical, now it’s a horizontal.
  • No two tech due diligences look alike.
  • Integration will usually take twice as long as you think it will – it’s not just about integrating technology, it’s also about integrating people. The appetite for change will also determine how rapid integration will be.
  • A lot of tech due diligence is conducted through situational interviews, as opposed to financial or legal due diligence, which is focused on reviewing documents.
  • You should prepare at least one year in advance for due diligence.

Learn More

Resources Mentioned

Meet Our Guest

Barr Blanton

Barr Blanton

CEO of Crosslake Technologies

Barr joined Crosslake from global management consulting firm McKinsey & Company where he was a partner in the Transformation and Private Equity practices and served as managing partner of the firm’s Charlotte, North Carolina office. Barr has extensive experience advising private equity firms, portfolio companies, and Fortune 500 clients on strategic and transformational initiatives.

Location Location: Charlotte, North Carolina

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