Due Diligence: Elysian Capital | Case Study - FarrPoint
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Due Diligence: Elysian Capital

Enterprise IT Due Dilligence

Due Diligence: Elysian Capital

FarrPoint client, Elysian Capital, was looking to acquire an new organisation. As part of this transaction, a review was required to consider how IT infrastructure could be separated from the Group’s IT operation and run independently post-acquisition.

Background

FarrPoint client, Elysian Capital, was looking to acquire an exciting organisation - SCX Special Projects Holdings Ltd (“SCX Special Projects”). The acquisition involved the carve-out of SCX Special Projects from its parent SCX Group. SCX Special Projects is known for its work completing the design and supply of Wimbledon’s Centre Court roof in 2005 and more recently, the roof for Number One Court and the retractable pitch at Tottenham Hotspur’s new stadium. Like this and all major acquisition transactions, thorough due diligence is required. As part of this transaction, a review was required to consider how SCX Special Projects’ shared IT infrastructure could be separated from the Group’s IT operation and run independently post-acquisition.

Requirement

Phase 1 – IT Review:

FarrPoint was chosen to complete a full IT Review of SCX Special Projects. FarrPoint’s Consultants were required to understand all the IT systems currently in place, and the infrastructure that would be available to the new business, before determining how the future requirements could be delivered and to build up associated costs.

All IT infrastructure was in-scope for the assessment – including:

The output from the IT Review was a robust report that highlighted the systems that were in place, the approach to providing these systems in the future, and the associated costs.

Phase 2 – Transition Plan:

FarrPoint was also appointed to develop a transition plan to implement the future technology requirements detailed in the IT Review to ensure continuity of services and meet future business goals. FarrPoint Consultants needed to establish details of the tasks and resources required to complete the project, which included:

Again, FarrPoint produced a precise transition plan and report that summarised each of the phases with milestone dates identified.

Our Approach

At its most basic level, IT due diligence is to determine the risks which could impact the transaction or post-transaction integration. FarrPoint has built up IT due diligence experience working on previous merger and acquisition (M&A) projects for Private Equity organisations, including earlier projects with Elysian Capital. The team also utilise the experience of trusted partner Avendris for projects that require additional specialist expertise.

Expert knowledge across all the technology elements in-scope for the IT Review was required, including familiarity of the costs associated with hardware, software and resources to implement the change. FarrPoint’s broad and extensive knowledge across IT and the associated costs, enabled Consultants to draw on experience from similar projects. FarrPoint’s understanding of the time and resources required to transition infrastructure was critical. Due to previous engagements with Investment and Private Equity firms, including Elysian Capital, the team knew what was required during M&A, how the client would prefer the information to be presented and what they need it for – in this case to ensure operational continuity post transaction, provide input into the financial modelling, and mitigation of the risks involved.

Outcomes & Tangible Results

IT Review:

FarrPoint’s review validated the current IT systems used by SCX Special Projects and identified those which would require to be replicated in order to continue operation after the transaction as an independent organisation. The report also recommended new hardware/software systems and cloud services that would be required along with associated costs. Details of the resources and skills needed to transition the IT requirements and estimations of the costs were also included. The most important element of the report specified the level of IT related risks and how to mitigate these.

Transition Plan:

FarrPoint’s plan outlined an extensive project timeline that captured the phases, tasks, resources and responsibilities required in order to separate the IT infrastructure of SCX Special Projects from the remainder of the Group. The plan detailed how, at the conclusion of the acquisition process, SCX Special Projects would have an entirely independent IT estate.

Elysian Capital’s main benefit gained from FarrPoint’s input was the expert knowledge of the complex IT requirements and costs of separation of IT elements. FarrPoint’s Consultants were able to understand the additional IT elements that would be required to allow SCX Special Projects to function as a separate stand-alone business. The pragmatic advice and recommendations were important in outlining the viability of the project and most importantly the cost of change. In addition, trusted advise was required to confirm the investment that would be required following the transaction to have functioning IT in place to support the business.

FarrPoint were able to help the client make an informed decision. The successful transaction was completed within the designated timeframe.

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