The year was 2010, Mr. Suranyi was finishing his MBA at the University of Notre Dame, when the realization of the value that was lost, due to unplanned technology related expenses post close of a private equity transaction became evident. This meant private equity firms were over paying for the targets by potentially millions of dollars while losing the efficiencies of the related technology. In a mid-market transaction, this could derail the investment thesis of the private equity firm and was a missed opportunity to reduce the final acquisition price of the target.
Furthering the Understanding
Combining his foundation in technology and advanced business degree, he sought a firm to further explore this endeavor, and pioneer the framework that would eventually be leveraged in hundreds of mid-market private equity transactions. Although the initial framework was leveraged across all industries, with revenues from $10M to $1B, there was still the question of how the framework would scale in larger transactions and would it provide the same value consistently in the upper-middle to large enterprise as it did in the mid-market. Another firm, another framework, larger transactions and the framework consistently provide significant value to the private equity firm to appropriately set the final acquisition price of the target while providing additional insight into longer term capital and operational costs, based on their investment thesis, for the financial models.
The new era of technology diligence
Based on the understanding developed while at two consulting firms, working with organizations across all industries from $10M to $5B, a new technology diligence framework has been developed based on the experience of over 200 private equity transactions to address key concerns that were developed. The enhanced framework will assist firms in lowering their target acquisition cost, while providing both capital and operational costs during their investment hold period to assist in the facilitation of a successful execution of their investment thesis.