Pre-Acquisition Technical Diligence

0.5–1% of deal value1–2 weeks

Know what you're buying.

Target company structural coherence, quantified.

All client data is confidential. Information is used solely for assessment and not shared with third parties.

What You Get

Target Company
Industry Benchmark
Formality
L2
L2
READY
Capture
L2
L2
READY
Structure
L2
L2
READY
Accessibility
L1
L1
READY
Maintenance
L2
L2
READY
Integration
L1
L2
STRETCH

Target Company Context Profile vs. Industry Benchmark

ProfileBenchmark GapRisk AssessmentInvestment Model
  • Risk to AI value creation: what's achievable vs. what requires post-close capex
  • Which AI initiatives contribute $0 without infrastructure investment
  • Valuation adjustment: recommended discount for AI-attributable EBITDA

How We Assess

We assess target company infrastructure through data room analysis, management interviews, and system documentation review.

AI value creation line items from CIM are validated against actual infrastructure state. Findings quantify risk: achievable vs. blocked EBITDA impact, hold period alignment, post-close capex requirements.

Output is IC/LP-ready: valuation impact quantified with recommended adjustments, hold period roadmap sequenced, 100-day plan actionable.

Process

Target company time

2–3 hours (management interviews)

Our turnaround

1–2 weeks (aligned to deal timeline)

Week 1

Data + Assessment

  • Data room review
  • Management interviews
  • System documentation
  • CMC scoring
  • Benchmark comparison

Week 2

Delivery

  • Draft review with deal team
  • Final deal memo
  • IC/LP-ready summary
  • Integration briefing

Compressed delivery available for accelerated deal timelines.

Deliverables

Target Structural Coherence Profile

Infrastructure state across 6 structural levers, benchmarked vs. industry

Red Flag Identification

AI initiatives that will fail post-close without infrastructure investment

Valuation Impact Analysis

AI value creation line items vs. infrastructure reality: achievable vs. blocked EBITDA

Hold Period Roadmap

Year 1–3 milestone sequencing within typical PE hold window

Risk to Deal Thesis

Quantified impact if infrastructure investment not approved

100-Day Plan

Critical path for post-close infrastructure build

Deal Memo Summary

IC/LP-ready executive summary with valuation recommendations

+ 30-day post-close follow-up included. Assessing multiple targets? See Portfolio Screening.

Falsifiable diagnosis. The infrastructure exists or it doesn't.

Sample Output

Excerpt from sample DD (Industrial manufacturing target, mid-market)

Target: ACME Industrial Components — $85M Revenue, 420 employees

Context Profile vs. Benchmark

Target Company
Industry Benchmark
Formality
L3
L3
READY
Capture
L2
L3
STRETCH
Structure
L2
L2
READY
Accessibility
L1
L2
STRETCH
Maintenance
L2
L2
READY
Integration
L2
L2
READY

Red Flags

AI-powered customer success

BLOCKED

Source: management deck, slide 14

Requires: Accessibility L3, Integration L3

Current: Accessibility L1, Integration L2

Status: will not function post-close

Investment to fix: $180-320K over 8-12 months

Predictive churn model

BLOCKED

Source: CIM, page 23

Requires: Capture L4, Maintenance L3

Current: Capture L2, Maintenance L2

Status: prototype only, cannot scale

Investment to fix: $120-200K over 6-10 months

Investment Summary

Post-close infrastructure investment: $300-520K

Timeline to stated AI capabilities: 12-18 months

Recommendation: Adjust AI value creation assumptions

Pricing

0.5–1% of deal value

Typical deal: $30–50M acquisition

Range: $25,000 – $35,000

Additional factors that may adjust pricing:

  • Target company complexity
  • Timeline compression
  • Data room accessibility

M&A deals are 10–100x larger than deployments, so percentage is lower (standard DD rate). Assessment fee credited if target enters portfolio.

Frequently Asked Questions

What does a pre-acquisition AI diligence assess?

A CMC pre-acquisition diagnostic profiles the target company's structural coherence across 6 structural levers. Structural deltas between the target's coherence and the AI value creation assumptions in the CIM reveal which initiatives fall outside the operating range post-close without infrastructure investment — typically 40-60% of AI line items in mid-market manufacturing deals.

How is AI deployment risk quantified for deal teams?

CMC compares the target's per-lever coherence against the infrastructure requirements of each AI initiative claimed in the investment thesis. A structural shortfall of 2+ levels in any lever means that initiative is above structural coherence — it will not deploy within a typical 3-5 year hold period without targeted capex. The diagnostic converts these shortfalls into valuation impact: achievable vs. blocked EBITDA, with recommended adjustments.

How long does the assessment take and what access is needed?

Delivery takes 1-2 weeks, aligned to deal timelines. The target company provides 2-3 hours of management interview time plus data room access. CMC structural coherence profiling, benchmark comparison, and IC-ready output are produced within that window. Compressed delivery is available for accelerated deal timelines at $25K-$35K (0.5-1% of deal value).

What is the difference between this and standard technology due diligence?

Standard tech DD evaluates current IT systems and technical debt. CMC pre-acquisition diligence evaluates whether the organisation's reasoning infrastructure can structurally support the AI initiatives driving the deal thesis. If the lever governing process documentation is below the required threshold, document extraction outputs cannot integrate cleanly into downstream systems — regardless of the vendor selected. This is an operating range constraint that IT audits do not detect.