CHANGE IN CONTROL

OVERVIEW

Advising CIOs and IT leadership on strategies and delivering solutions to optimize spending and financial discipline through Corporate Lifecycle Events/ Change-in-Control triggers such as Mergers & Acquisitions (M&A), Divestitures, Carve-Outs, and shifts from Public to Private Equity.

THE CHALLENGE

Corporate Lifecycle Events that trigger CiC clauses present a contractual obligation for clients to obtain the vendor’s consent prior to the deal closing. ClearEdge helps clients turn that event into a compelling spend leverage opportunity:

  • Generally, all major enterprise IT contracts must be dealt with pre-close, before the CiC event

  • Almost all M&A activity involves a Transition Services Agreement (TSA) between buyer and seller for continuity of existing internal IT Services for a period of time, post-deal close; the presence of a TSA requires additional vendor consent and targeted pre- and post-close operational oversight

  • Software audits will increase as vendors mull uncertainty over the post-close account ownership and IT direction

  • Cloud and other “as-a-service” contracts also need contractual attention and post-close governance consideration

  • M&A activity frequently drives changes to OpEx and CapEx, with financial implications for IT, post-close

APPROACH

ClearEdge’s domestic and international experience in IT Financial and Vendor Management is ideally suited to assist our clients in navigating the strategic opportunity that CiC creates for value realization:

TACTICAL

Obtaining consent for the CiC from each IT Vendor in a client’s environment is generally the minimum that is required, usually at an incremental cost to the client for the consent, even if no additional IP is being acquired.

STRATEGIC

Develop Multi-Year Spend Model for IT Cost Optimization.

  • Negotiate directly with the IT vendors on behalf of clients for consents, needed post-close IP, & TCO improvements

  • Partner with clients to identify high-value and high-impact vendor consolidation opportunities

  • Use CiC to client’s advantage for dealing with legacy contracts that contain sub-optimal terms and conditions, such as evergreen

  • Playbook development