Seven-Day Commercial and Regulatory Diligence on a Government Software Target

A PE buyer signed an LOI for a roughly $30M HR software business serving state and federal agencies and had about 10 days to complete diligence. The hard questions sat less in the product than in the policy around it. Federal policy had swung from a government-built system toward commercial software. The target billed per user while federal headcount was shrinking. And the buyer needed to know whether the target’s FedRAMP authorization would carry over in the transaction. The deal team needed a provider that could answer all three before the window closed.

The provider completed a commercial and regulatory assessment in seven days, inside the deal’s diligence window. The specialist was able to:

• Assess how shifts in federal procurement policy could affect demand for commercial HR software
• Evaluate revenue exposure from per-user pricing as federal headcount declined
• Review whether the target’s FedRAMP authorization would transfer with the business