Gartner Research

How to Re-evaluate Strategic Vendors Acquired by Private Equity

Published: 08 September 2014

ID: G00267514

Analyst(s): Colin Fletcher, Robert Naegle, Gary Spivak

Summary

When a private equity firm acquires a public IT vendor, the resulting company is likely to have a vastly different financial structure, business model and objectives. In this research, Gartner outlines five best practices that I&O leaders can use to assess the acquisition.

Table Of Contents
  • Key Challenges

Introduction

Analysis

  • Determine Whether the Actions of the New Owners Align With I&O Interests
  • Obtain Independent Opinions of the Vendor's Financial Status
  • Review the Vendor's Strategic Road Map and Carefully Monitor Its Progress
  • Scrutinize Nonfinancial Data Points At Least Three Months Prior to Contract Renewals
    • Hiring/Staff Reductions
    • Sales Force Continuity
    • Support Level
    • Acquisitions
  • Leverage the Uncertainty in Negotiations With Vendors That Are Still Deemed to Be Strategic

Case Study

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