With its new ParaVerify IT methodology, Paranet Solutions - it managed service provider in Dallas can assign value to data and quantify risk that can impact acquisition priorities.

1. Case Study:
Private Equity
PARAVERIFY IT REDUCES ACQUISITION RISK AND PURCHASE
PRICE FOR PRIVATE EQUITY CLIENT
In today’s highly regulated business environment, accurately assessing Total Cost of
Ownership (TCO) and potential risks have become almost impossible for private
equity firms. When a company sets out to acquire, it will scrutinize every detail of
that organization’s financials, operations and legal issues. But what is often left out
of the due diligence process is a review of the IT infrastructure and security threats.
This oversight can result in unanticipated IT spend and possible regulatory
compliance issues down the road.
Paranet Solutions recently completed just this type of due diligence for a private
equity firm. The results of this evaluation and analysis made a significant impact on
the acquisition process.
THE CHALLENGE. Prior to acquiring a national medical services company, one private
equity firm decided it wanted a clear picture of the entire organization prior to
purchase. It looked to Paranet Solutions for some answers. The project objectives
were as follows:
• Determine the company’s’ current technology status, including hardware,
systems software and applications software; as well as the level of
automation the business had in place.
• Identify issues related to the company’s ability to maintain its current
technology and meet its business plan.
• Assess financial implications of the company’s technology environment.
• Provide the private equity firm with a clear understanding of the TCO and
identify any business risks associated with the acquisition.
• Provide a remediation roadmap once the acquisition was complete.
THE SOLUTION. “This private equity firm selected us to complement the work already
being performed by their financial, legal and operational analysts because we
offered a proven and proprietary approach to the IT portion of the due diligence
process,” says Alan Bratton, Chief Executive Officer of Paranet Solutions. “By utilizing
our comprehensive solution for calculating TCO and risk – ParaVerify IT™ – we were
able to bring tremendous value to this acquisition process.”
Paranet reviewed and
cataloged:
• All server-based
applications
• Hardware and software
infrastructure architectures
• Voice and data network
infrastructures
• Policies and procedures
• All automation processes
• Identified major ongoing
technology expenses
“By utilizing our comprehensive
solution for calculating TCO and
risk – ParaVerify IT – we were
able to bring tremendous value
to this acquisition process.”
-Alan Bratton
Paranet Solutions, CEO
Paranet Solutions Contact:
214.623.5150 (phone)
214.623.5301 (fax)
214.623.5200 (support)
Paranet Solutions | www.paranet.com

2. Paranet Solutions | www.paranet.com
ParaVerify IT is the result of Paranet’s 20+ years of experience delivering IT assessment services for companies going
through a merger or acquisition. It is a methodology that specifically targets the areas often overlooked during the
valuation process. By examining infrastructure and applications, IT security, service delivery and support, Paranet can
assign value to data and quantify risk that can impact acquisition priorities.
For this particular private equity client, Paranet reviewed and cataloged all sever-based applications; scrutinized
hardware and software infrastructure architectures, as well as voice and data network infrastructures; reviewed
policies and procedures; identified major ongoing technology expenses; and
reviewed all automation processes to determine if they were effective and
enhancing productivity.
THE RESULTS. As a result of Paranet’s research, report and recommendations,
the client was able to lower the purchase price of the medical services company
by more than $1,000,000.
Some of the more significant efficiencies and deficiencies identified by Paranet included:
• A moderate to high risk to the company’s infrastructure environment due explosive growth coupled with a
poorly defined backup and recovery process.
• Spam filtering was adequate and viruses were rare and well contained.
• Data centers were not operating according to industry best practices.
• Hardware and software infrastructure architectures were modern and current, but interfaces between
applications were inconsistent and required constant attention.
Paranet identified the following business risks:
• A disaster recovery plan that was incomplete, unclear and untested. Likewise, the company had no physical
security plan. Mission- and business-critical systems were operating on a single, non-redundant platform.
• A vulnerable and limited backup power supply.
• A lack of succession planning.
• Poor integration of system interfaces that fed into financial software.
• No asset management or configuration management plan.
• A lack of formal budgeting and planning processes.
• No external security audits were being performed.
“The assessment summary we provided the client played a critical role in the negotiation process,” says Bratton. “We
identified several areas of concern that left unaddressed, would have resulted in a significant post-acquisition
investment.”
As a result of Paranet’s research,
report and recommendations, the
client was able to lower the purchase
price of the medical services
company by more than $1,000,000