Issues Related to Acquisition or Divestiture of Software Assets

This article is reprinted with permission from the May 2004 issue of TEQ magazine.

Almost all companies have important software assets. These assets may include software developed by the company that is being licensed for significant revenue. However, even companies that are not software companies have often invested considerable time and money in establishing computer systems that are very important to the company, such as accounting software, CRM systems, inventory management software and intranets.

When a company is being acquired, it is important for both buyers and sellers to focus on these assets to make sure that there are not any surprise problems when the acquisition is completed. The following are some of the issues that should be addressed as part of the due diligence process.