When acquiring a new Portfolio Company, there are two important things to look at when it comes to IT operating costs. First, you should look at where the company's IT spend has been invested. Second, and more importantly, you need to look at where it hasn't been allocated.
When you're under LOI, it's important to understand the current state of a company's IT environment before fully committing to the acquisition. Knowing if a company's IT systems are saleable and able to support the future growth of the company will give you the confidence you need to proceed. However, all to often companies are hit with surprise capital expenses.
In order to expose common IT costs within Portfolio Companies, we explore the top three hidden capex for IT.