Hightower Intelligence — For Acquirers
Technology & Operations Diligence
For buyers under LOI on a service business that runs on a shared drive and software that has not been updated since 2019.
The gap this fills
Quality of earnings establishes whether the numbers are real. Counsel establishes what you are signing. Neither one opens the software the business runs on, and in a paper-heavy service company that is where most of the year-one surprise sits: the scheduling system the software vendor is sunsetting, the seat licenses that were never purchased, the credentials living in one contractor's account from a few years ago.
Above roughly $50M of enterprise value this is a standard diligence workstream, and the large advisory firms run it. Below $10M the budget will not stretch to a firm of that size, so the work either does not happen or the buyer attempts it alone, alongside everything else the exclusivity period demands. I run the same workstream, scoped to deals financed with SBA or lower-middle-market debt.
When it runs
Post-LOI, inside exclusivity
The 30 to 90 day window in which findings can still change the outcome: reprice, add an escrow or an indemnity, extend the transition services period, or withdraw. After close, the same findings are liabilities you already own.
Post-close, first 100 days
A separate engagement, paid out of operating budget rather than deal budget: what gets corrected, in what order, by whom, and at what cost. This is usually the larger of the two engagements, and the diligence report already establishes the sequence.
Sell-side, pre-listing
For brokers and owners who would rather identify the problems themselves than have a buyer find them during exclusivity.
What the report contains
The stack, named
Every system the business runs on, with software versions, support and end-of-life status, hosting arrangements, and the holders of the administrative credentials.
Licensing exposure
License counts against actual seat counts, contract terms, renewal and escalation dates, automatic renewal provisions, and what transfers on a change of control.
Key-person dependency
Which named person holds which credential, which processes exist only in one person's memory, and what fails in the week after the seller becomes unavailable.
Data and records
Where the operating records reside, whether they can be extracted, and whether the figures in the CIM can be reconstructed from the systems that produced them.
Security and compliance posture
Access control, backups that have been tested, handling of regulated data, and any obligation the buyer inherits at close.
Integration and remediation load
What must be corrected in year one and what can wait, in the order it has to happen, sized in ranges against outside reference points.
It arrives as a findings list your lender and your counsel can read directly. Each item is marked for whether it changes the price, changes the structure, or is simply a cost to expect in year one.
On the conflict of interest
I do the diligence, and I also do integration and build work. That gives me an incentive to find the company repairably broken, which is a real conflict. Four things constrain it here:
- The fee is flat. It is not contingent on the deal closing, and it is not contingent on what the review finds.
- Remediation pricing stays out of the diligence report.
- Findings are written as evidence you can verify independently: version numbers, seat counts, contract dates, named credential holders. The same evidence is available to the seller's advisors.
- The list is yours, and you are free to take it to any vendor.
There is also a constraint I do not control. If you use my findings to retrade, the seller and their advisors will contest them line by line, and anything that does not hold up follows me. In a market this small, that governs my conduct more effectively than any policy I could put in writing.
Relevant experience
I build and maintain the systems these businesses are meant to be running on, which is a different vantage point from reviewing them at a distance.
For a Texas physician directorship overseeing 90+ locations, I built three connected platforms on a shared backend in about two months, after they had spent nine months with other developers and shops attempting to get a working system. I maintain it solo, AI-assisted: roughly 250,000 lines of code carrying patient data, about 100 synchronous telehealth visits a week, no security incidents and no data loss since launch. It absorbed roughly two full-time administrative workloads.
I know what a multi-location, compliance-heavy service operation looks like from the inside, what its systems cost to keep running, and which problems are cosmetic and which consume a year.
Scope and fee
Fixed fee, agreed before the work begins, scoped to the size of the target and the length of your exclusivity period.
Deals die for reasons that have nothing to do with the systems, so the fee is reduced if the deal dies. If it closes, the full diligence fee is credited against integration work, so you do not pay twice for the time already spent inside the systems.
Send me the target, the timeline, and the other parties in the diligence room, and I will scope the engagement.
Currently under LOI?
Send the target and the close date. The first conversation carries no fee and will establish whether this engagement is warranted on this deal.
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