[New Service] Launch of "IT DD Accompanying Support Service" to Quantify M&A Technology Risks in as Little as One Month and at Less Than Half the Cost of Major Firms

Ragate Inc. (hereinafter "Ragate," Location: Chuo-ku, Tokyo, Representative Director: Ryuyoshi Mashiko) has launched the "M&A IT Due Diligence Accompanying Support Service," which accurately and speedily executes technology-related due diligence (DD) in M&A.

This professional service utilizes generative AI for system analysis to quantify technical debt and provides DD reports directly linked to investment decisions. Furthermore, it offers end-to-end support, including the Post-Merger Integration (PMI) transition plan after DD completion.

▶ Service Details and Inquiries Here

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Background of Service Provision

In recent years, the number of domestic M&A deals has remained high, with a rapid increase in cases targeting DX systems of technology companies and operating companies. Against this backdrop, the importance of "IT Due Diligence (IT DD)" as a critical process influencing the success or failure of M&A is rapidly growing.

However, companies conducting or commissioning IT DD face three major challenges on the ground:

The first challenge is "shortage of specialized personnel." DD practitioners with expertise in the IT domain are rare both internally and externally, making it difficult to ensure survey quality. The second challenge is "tight DD periods." Within the constraints of the deal schedule, completing a comprehensive technical investigation within the timeframe is highly difficult, and cases where decisions are forced despite uncertainties are endless. The third challenge is "high investigation costs." Requests to major consulting firms can amount to tens of millions of yen, and in many cases, the cost does not align with the deal size.

Furthermore, if a closing proceeds without IT DD or with insufficient quality, three cascading risks may arise after the acquisition: "explosion of repair costs due to the manifestation of technical debt," "dissipation of knowledge due to the outflow of core engineers," and "failure of PMI plans and unachieved business synergies," potentially significantly impairing the overall ROI of the deal.

To directly address these market challenges, Ragate has launched this service, integrating AWS certified technical capabilities with management strategy insights from MBA holders.

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Highlights of Service Content

The main features of this service are as follows:

• High-speed system analysis through AI-driven reverse engineering: Automated analysis of source code and infrastructure configuration using generative AI. Even for legacy systems without documentation, the entire scope of technical assets can be visualized in as little as one month. This provides a quantitative understanding of technical debt in black-boxed systems, offering a basis for investment decisions.

• Achieving "bridging management and technology" through complex risk assessment by MBA x Technology: MBA holders connect valuation (corporate value assessment) with IT asset valuation. Technical debt is converted into cost impact, providing a quantitative DD report directly linked to valuation adjustments and the design of representations and warranties. The report is delivered in a two-tiered structure: an executive summary for management and investment committees, and a detailed version for technical teams.

• Maximizing ROI through seamless transition from DD report to PMI: This service consists of three phases: "Investigation and Visualization," "Risk Assessment and Reporting," and "PMI Transition Plan Formulation." The DD deliverables are directly utilized as the foundation for the PMI integration plan, providing continuous support from the formulation of the system integration roadmap after closing to the establishment of operational and maintenance systems. The Essential Plan (DD support & report submission) starts from 4.98 million yen, offered at less than half the price of major consulting firms.

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Ragate's Insights and Future Outlook

In M&A, technology-related DD has traditionally been hampered by three barriers: "lack of specialists, lack of time, and excessive costs," resulting in insufficient quality. However, with the evolution of generative AI, system analysis that previously took skilled engineers weeks is now being automated and accelerated. We view this technological shift as a turning point that will fundamentally transform the nature of IT DD.

As a future industry trend, we believe that "quantitative evaluation of technical assets" in M&A will no longer be an option but a standard process for investment decisions. Particularly in deals targeting startups and mid-sized IT companies with SaaS and DX systems as their core business, the scale of technical debt increasingly influences valuations by hundreds of millions of yen.

We strongly recommend that corporate planning departments and investors utilize this service to incorporate the process of transforming "invisible risks" into "visible value" from the early stages of a deal. Ragate will continue to strengthen its specialized support in the M&A x Technology domain, guided by its mission to "democratize cutting-edge technology."

▶Service Details and Inquiries Here

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Company Information

Service Overview

• Fixed-price Technology Advisory Support

• DIGITAL PMI Support Service

• AI-driven Cloud Migration Support Service

• M&A IT Due Diligence Support Service

• [AWS FTR Certified] End-to-end Accompanying Support from AX Strategy Formulation to Organizational Adoption

• MVP Construction Support Achieved with AI Vibe Coding

• Performance-based RFP Creation and Vendor Selection Support Service

• Vulnerability Diagnosis and Load Testing One-Stop Support

• Copilot Studio Introduction and In-house Development Support Service