Private Equity Firms and their portfolio companies may obtain IT-ODD services from several potential providers, including IT-Due Diligence “tag-on” services from financial due diligence providers, IT consultancies offering IT-Due Diligence services, former corporate IT personnel, IT Leadership within an existing portfolio company – or Aqualis Advisors.

Among these options, Aqualis Advisors is uniquely positioned to best provide strategically-focused IT-ODD advisory services for the following three reasons:

1. Our leadership exclusively performs all of our engagements.  We bring more than 35+ years of Senior Partner-level experience to every IT-ODD engagement – including 18+ years of experience specifically performing IT-ODD on 300+ middle-market companies for 75+ Private Equity Firms.
2. Our exclusive focus is to provide independent, unbiased, strategically-focused IT-ODD advisory services related to Private Equity-sponsored Middle-Market  Transactions.
3. Our fixed-fee IT-ODD advisory services includes our judgment and perspectives based on what IT capabilities should be there to support current and future business growth, including EBITDA improvements, not just what actually exists.

Please explore each topic in greater elaboration below:

We do not leverage our engagements utilizing lesser experienced personnel.

• By comparison, nearly all financial due diligence or IT consultancy providers will leverage their IT-Due Diligence staff, usually without committing their IT M&A practice leadership to your engagement.
• While a trusted “retired” CIO or other corporate IT personnel might be similarly experienced, Aqualis Advisors will commit the equivalent with a “non-retired” specialist that also has significant business management and M&A consulting experience in order to provide a perspective beyond just the tactical technology.
• While utilization of IT leadership from within an existing portfolio might appear to be an obvious resource and these individuals may be experts in their area of focus, they will rarely have the breadth and depth of experience necessary to conduct strategically-focused IT-ODD or have a sufficient experience base from which to anticipate potential complexities associated with each transaction.

• Our IT-ODD advisory services can be provided on a post-close basis in the case of some lower middle-market transactions with minimal IT capabilities. We can be available to provide remote-based assistance to better understand our IT-ODD findings and their implementation by Target personnel, at the request of our Private Equity Clients.  However, we do not seek to provide IT consulting services.
• By comparison, that means that we do not perform IT-ODD engagements looking for high-value follow-on consulting fees.  Generally, financial due diligence, IT consultancy and other providers all market their IT-Due Diligence services among a broad array of IT-related services, all of which yield significantly greater fees than a customary pre-close IT-Due Diligence engagement.

Can your IT-ODD provider truly act in your best-interests, independent and unbiased, when the state of the Target’s IT capabilities represents a significantly more lucrative future revenue opportunity?

Our judgment is rendered through our IT-ODD findings and the basis of those findings as well as our commentary and suggestions, which is exactly how our IT-ODD Final Report is structured.  We are not “selling” our time, our methodology or the representations of our brand.

Since we understand what needs to happen on a middle-market IT-ODD engagement, we are able to determine the fixed-fee and absorb the risk that will arise with each transaction.  We never seek to pass that risk back to our Private Equity Clients by performing Time & Materials-Fee engagements.

All of our fixed-fee strategically-focused IT-ODD engagements are arranged and conducted by our leadership that has:

• Participated in the evolution of information technology as a corporate resource over the last 35+ years.
• Relevant middle-market executive experience dealing with IT deployment issues, practice leadership experience within global consulting firms providing M&A and IT-related management consulting services and commercial application software company practice leadership experience.
• Learned from experiences associated with both successes and failures with corporate information technology deployments.

By comparison, typical financial due diligence and IT consultancy staffing, with an average of 7-10 years of experience with recent IT issues, simply cannot have had the time to gain comparable experience.

How can you believe in the findings and suggestions of resources with inadequate experience?

• Aqualis Advisors uniquely markets its IT-ODD advisory services as its exclusive business offering, both on a pre and post close basis.
• We believe that by focusing on our IT-ODD services we can provide the investment community and our private equity clients with a truly independent, unbiased assessment of a Target’s information technology capabilities without anticipation of follow-on revenues from any Target situation that we were asked to objectively assess.

s a focused due diligence services offering, our strategically-focused IT-ODD advisory services complement financial, legal and other specialized transaction due diligence activities.

• This approach allows our Private Equity Clients to deploy “best-in-class” due diligence by facilitating the engagement of the best due diligence provider for each discipline. 
• The result is an improved, multifaceted assessment of the Target based on an aggregation of the independent results of each specialized investigation. 

Some Private Equity Firms believe that using their financial due diligence “tag-on” IT-DD services results in easier “one-stop-shop” coordination of both financial and IT due diligence activities. However…

• We can be easily engaged with minimal incremental coordination to provide superior results while minimizing Target personnel’s day-to-day activities.  
• When engaging a single due diligence services provider, the results from one due diligence activity may influence or bias the results of the other activity when performed by the same provider vs. allowing differing perspectives to be identified for consideration.

Many middle-market companies appear to be adequately deploying sufficient business applications since they are able to facilitate processing of business transactions and generate sufficient reporting of operational and financial results.

• However, as a result of experience and judgment-based analyses, it was determined that many of these same companies were not leveraging information technology to achieve maximum productivity, revenue generation or market development value.
• Likewise, information technology capabilities have not been appropriately architected to truly enable the company’s business model and strategic objectives in order to achieveexit-oriented enterprise value creation — which experience facilitates both recognition and suggestion of remedial recommendations.

Many of our Private Equity Clients were first-time users of external IT-ODD services and, as a result of our unique approach, understand the need for IT-ODD as well as unique value of our findings and recommendations.

• Previously, they typically assumed that sufficient operational and financial results were being generated to support their financial due diligence requests, therefore no specific, focused, independent IT-ODD was included in their due diligence efforts.
• However, after reviewing our findings and recommendations, they realized how they could more effectively leverage technology to achieve their strategic and financial objectives and have a clear understanding of the financial impact.

Aqualis Advisors’ proven services delivery model, which has been consistently utilized on 300+ engagements, is based upon a core belief that transactions require the active participation of relevantly-experienced professionals and should not be training grounds for developing leveraged, junior resources, as well as that each transaction’s strategically-focused IT-related issues are unique, thereby invalidating the utilization of cookie-cutter-approach checklists generally deployed by other, leveraged IT due diligence providers.

This approach makes Aqualis Advisors unique among the array of potential information technology due diligence providers.  In fact, many of our Private Equity Clients have converted from their use of financial due diligence tag-on or generalized IT consulting services because they have found that our judgment and insight is valuable and not available from other IT due diligence providers — who either deployed less experienced resources or could not provide a comparable perspective.

Aqualis Advisors’ policy is to not actively seek to develop follow-on services with any diligenced Target as a primary source of revenue generation.

• 35+ years of business and information technology consulting experience confirms that seeking follow-on services contradicts any due diligence provider’s ability to be truly unbiased and independent.
• In our opinion, IT operational due diligence is an assessment, not a diagnostic.  If it is not rendered independently and unbiased, it is simply not an assessment, and it may be a conflict of interest to the detriment of the acquirer.

 Our strategically-focused IT-ODD advisory services complement the internal control reviews conducted by your financial due diligence provider, usually an audit firm. With Sarbanes-Oxley and the renewed focus on internal controls, this specialization remains a core-competency of an audit firm.  If the need is for a controls review or the validation of the veracity of the financial statements, then the desired IT Due Diligence is probably best performed by the financial due diligence provider.  

But if not…

Aqualis Advisors is uniquely qualified to provide our business and technology experience to the IT-ODD aspects of the transaction.  Leveraging more than 300+ completed Middle-Market Private Equity sponsored transaction engagements – We focus on the role of Information Technology as being either an asset or liability to Target’s current and future business operations – especially as the Target’s IT capabilities may enable desired EBITDA growth during the holding period as a portfolio company.

Our leadership, which arranges and conducts all of our IT-ODD engagements, provides 35+ years of senior partner-level experience with information technology complexities associated with:

• Successful IT deployment strategies and failures.
• Practical, realizable transition services agreement timetables and conditions
• Business operations integrations successes and failures.

Our leadership, which arranges and conducts all of our IT-ODD engagements, has seen it all during the last 35+ years of the corporate information technology evolution.

There is no substitute for experience – especially if an Exit Strategy is at risk.

 Our IT-ODD advisory services are designed to be conducted without geographic preference or restriction. 

While Pre-Pandemic actual site inspections were based upon an on-site/physical review – Post-Pandemic, all of our assessments of Target’s IT capabilities deployments, including any personnel competency evaluations, have been able to be successfully completed remotely utilizing current-state technology.

This Post-Pandemic / “Virtual” Facility/Operations Review approach reduces both engagement elapsed-duration and travel-related expenses while also reducing distractions and attention associated with Pre-Pandemic on-site reviews.

As such, Aqualis Advisors continues to be able to provides a broader level of experience to our Target IT capabilities deployment reviews, than may be able to be achieved via utilization of lesser-experienced local resources..

Aqualis Advisors’ engagements are arranged and executed by founder David M. Jung, who previously founded Aqualis Partners, LLC in 2006 and has personally conducted all 300+ engagements for our 75+ Private Equity clients.  As necessary, independent external advisors may collaborate either during an engagement or post-engagement in order to provide a comprehensive scope of services.