Quality of Technology Diligence Reports for Independent Sponsors & PE Firms
Transform technology from a deal risk into a value driver. Our comprehensive Quality of Technology (QoT) reports provide the critical insights you need to make informed acquisition decisions. Similar to a Quality of Earnings report for financials, our QoT delivers a complete snapshot of the target company's technology health, risks, and opportunities.
A Quality of Technology (QoT) report is the technology equivalent of a Quality of Earnings (QoE) financial diligence report. Just as a QoE provides assurance about a company's financial health, a QoT delivers a comprehensive assessment of the target company's technology infrastructure, cybersecurity posture, compliance status, and digital capabilities.
Our QoT reports are specifically designed for independent sponsors, search funds, private equity firms, and strategic acquirers who need to understand the technology risks and opportunities in their acquisition targets.
Why You Need a Quality of Technology Report
Technology is no longer just a support function—it's a critical business asset that can make or break an acquisition. A comprehensive QoT report helps you:
Identify Hidden Liabilities: Uncover cybersecurity vulnerabilities, compliance gaps, and technical debt that could impact valuation
Validate Technology Claims: Verify that systems, software, and infrastructure align with seller representations
Assess Integration Complexity: Understand the effort and cost required for post-acquisition technology integration
Discover Value Creation Opportunities: Identify areas where technology improvements can drive operational efficiency and growth
Support Negotiation: Use findings to adjust purchase price or negotiate seller remediation commitments
Plan Day 1 Operations: Develop actionable roadmaps for immediate post-close technology needs
What's Included in Our QoT Assessment
Our comprehensive Quality of Technology report covers six critical areas:
1. Cybersecurity Posture Assessment
Current security controls and practices evaluation
Vulnerability assessment and penetration testing summary
Incident history and breach exposure analysis
Security tool stack review and effectiveness
Employee security awareness and training status
Third-party risk and vendor security practices
2. Compliance & Regulatory Requirements
Industry-specific compliance status (HIPAA, PCI-DSS, SOC 2, etc.)
Data privacy regulations (GDPR, CCPA, state laws)
Manufacturing and defense compliance (CMMC, NIST 800-171, ITAR)
Audit history and findings
Required remediation and timeline estimates
Ongoing compliance cost projections
3. Software & Technology Stack Diligence
Complete software inventory and licensing audit
Software license compliance and true-up risks
Critical application dependencies and single points of failure
Proprietary vs. commercial software assessment
Software maintenance agreements and support status
Cloud services and SaaS subscriptions review
Technology debt and obsolescence analysis
4. Infrastructure & Architecture Review
On-premises infrastructure assessment
Cloud infrastructure and services evaluation
Network architecture and connectivity
Disaster recovery and business continuity capabilities
Scalability and capacity planning
Infrastructure-as-Code maturity
Total Cost of Ownership (TCO) analysis
5. IT Personnel & Organization
IT team structure, roles, and responsibilities
Key person dependencies and knowledge concentration
Unlike traditional IT audits that can take months, our streamlined QoT process delivers comprehensive results in 2-3 weeks, ensuring your deal timeline stays on track.
Phase 1: Discovery & Planning (Days 1-3)
Kickoff meeting with deal team
Document request list delivery
Access requirements and logistics coordination
Custom assessment scope refinement
Phase 2: Assessment & Analysis (Days 4-12)
Document review and analysis
Virtual and on-site technical interviews
System access and configuration reviews
Security scanning and testing (if authorized)
Vendor and contract analysis
Phase 3: Findings & Reporting (Days 13-18)
Comprehensive written report with executive summary
Risk categorization (High, Medium, Low)
Financial impact analysis for identified issues
Prioritized remediation roadmap
Integration complexity assessment
Phase 4: Presentation & Q&A (Days 19-21)
Management presentation of findings
Detailed technical walkthrough with deal team
Integration planning session
Post-close support recommendations
QoT Report Deliverables
Executive Summary
Key findings and critical risks
Overall technology health rating
Major investment requirements
Strategic recommendations
Go/no-go insights for decision makers
Detailed Technical Report
Comprehensive findings across all six assessment areas
Evidence and supporting documentation
Quantified risk assessments
Comparison to industry standards and best practices
Technical diagrams and architecture documentation
Financial Impact Analysis
Immediate remediation costs
Ongoing operational cost adjustments
Capital expenditure requirements
Integration cost estimates
Potential cost savings opportunities
Prioritized Action Plan
30-60-90 day remediation roadmap
Critical items for Letter of Intent (LOI) or Purchase Agreement
Day 1 operational requirements
Long-term technology improvement plan
Quick win opportunities
Integration Playbook
System consolidation strategy
Data migration complexity assessment
Network and security integration requirements
Application rationalization recommendations
Change management considerations
Who Benefits from Our QoT Services
Independent Sponsors & Search Funds
Acquiring your first or next SMB requires confidence in all aspects of the business. Our QoT reports help you:
Make informed decisions with limited internal IT resources
Negotiate better terms based on technology findings
Plan realistic post-acquisition technology budgets
Avoid costly post-close surprises
Private Equity Firms
Add technology diligence to your standard investment process:
Standardize technology assessment across portfolio
Identify value creation opportunities in the technology stack
Support portfolio company performance improvement
Mitigate technology-related investment risks
Strategic Acquirers
Ensure smooth integration and maximize synergies:
Assess compatibility with existing systems
Quantify integration complexity and costs
Identify redundancies and consolidation opportunities
Validate technology-driven revenue synergies
Sell-Side Advisors
Prepare your clients for a smoother transaction:
Proactively identify and remediate technology issues
Create a clean technology narrative for buyers
Reduce buyer concerns and objections
Support higher valuations through technology readiness
Why Choose Preferred Data for Your QoT Report
37+ Years of Technology Expertise
Since 1987, Preferred Data (formerly Preferred Data Corporation) has been providing technology solutions to manufacturers and operational businesses. We bring decades of real-world IT experience to every assessment.
Big Tech Experience for Middle-Market Deals
Our team has worked with Fortune 500 companies and brings enterprise-grade expertise to mid-market acquisitions—capabilities typically unavailable at the SMB level.
Manufacturing & Operational Focus
We specialize in manufacturers, distributors, and operational businesses where technology intersects with physical operations. We understand:
ERP and MES systems
OT/IT convergence
Production system dependencies
Supply chain technology
Quality management systems
M&A Transaction Experience
We've supported numerous M&A transactions and understand:
Deal timelines and pressure
Confidentiality requirements
Working with investment bankers and attorneys
LOI and Purchase Agreement implications
Post-close integration challenges
Actionable, Business-Focused Reports
Our reports are written for business decision-makers, not just technical audiences:
Executive summaries for deal principals
Financial impact quantification
Clear risk categorization
Practical recommendations
Plain-English explanations
Investment & Pricing
Standard QoT Assessment: $30,000 - $50,000
Pricing varies based on:
Company size (employee count, revenue)
Technology complexity
Number of locations
System breadth and depth
Timeline requirements
Level of access provided
What's Included
Complete assessment across all six core areas
Comprehensive written report (80-120 pages typical)
Executive presentation
30 days of post-report Q&A support
Integration planning session
Optional Add-Ons
Expedited Timeline: Rush delivery in 10 business days (+$10,000)
Post-Close Integration Support: On-site support for technology transition ($5,000-$15,000/month)
Ongoing vCIO Services: Strategic technology advisory for portfolio companies ($2,500-$7,500/month)
Remediation Services: Implement recommended fixes pre- or post-close (custom pricing)
How Our QoT Differs from a Standard IT Audit
Feature
Standard IT Audit
PDC QoT Report
Timeline
8-12 weeks
2-3 weeks
Audience
Technical teams
Business decision-makers
Focus
Compliance & controls
Business risk & value
Output
Technical findings
Financial impact analysis
Cost
$50,000+
$30,000-$50,000
Integration Planning
Not included
Core deliverable
M&A Context
Generic
Deal-specific
Frequently Asked Questions
When should I order a QoT report?
Ideally during the Letter of Intent (LOI) phase after initial financial diligence. This timing allows you to:
Address technology concerns before the Purchase Agreement
Negotiate purchase price adjustments if needed
Plan post-close integration activities
Maintain deal momentum
Do you need access to the target company's systems?
We can perform a comprehensive assessment with varying levels of access:
Full Access: On-site visits, system logins, configuration reviews (most comprehensive)
Minimal Access: Public information, seller-provided documentation (suitable for early-stage assessment)
Will the assessment disrupt the target company's operations?
No. Our process is designed to be minimally disruptive:
Flexible scheduling around business needs
Read-only system access when required
Efficient interviews (typically 1-2 hours per person)
After-hours work available for sensitive systems
Can you help implement the recommendations?
Yes! We offer post-close services including:
Managed IT Services as your ongoing technology partner
Integration project management
Remediation implementation
Ongoing vCIO (Virtual CIO) advisory
Training and knowledge transfer
What if we're acquiring multiple companies?
We offer portfolio pricing for firms conducting multiple acquisitions:
Standardized assessment frameworks
Streamlined subsequent engagements
Portfolio-wide technology strategy
Bulk pricing discounts
Get Started with Your Quality of Technology Assessment
Don't let technology risks derail your acquisition or erode post-close value. Our Quality of Technology reports provide the insights and confidence you need to make smart investment decisions.
Ready to de-risk your next acquisition?
Schedule a consultation with our M&A technology experts to discuss your specific needs and how a QoT report can support your transaction success.
Next Steps:
Schedule a Discovery Call: 30-minute discussion of your transaction and timeline
Receive Custom Proposal: Tailored scope and pricing for your specific situation
Kick Off Assessment: Begin work immediately upon engagement
Receive Your Report: Comprehensive QoT delivered in 2-3 weeks
About Preferred Data
Since 1987, Preferred Data has been the trusted technology partner for manufacturers, distributors, and operational businesses. Our unique combination of deep technical expertise, manufacturing industry knowledge, and M&A experience makes us the ideal partner for your Quality of Technology diligence needs.
Contact us today to ensure your next acquisition has the technology foundation for success.
