Software Compliance Risks in Mergers and Acquisitions
The software licensing risks in mergers, acquisitions and divestitures: non-transferable licenses, audit exposure, duplicate tools and how to handle them in due diligence and integration.
By the MI Solutions SAM team10 min read3 exhibits
Mergers and acquisitions change who uses software, under which legal entity and on which infrastructure. Licenses that were compliant the day before closing may not be the day after. Some cannot be transferred at all. Others now cover users they were never meant to cover. And publishers know that transactions are a good moment to audit.
Where the risks sit
Exhibit 1
A deal timeline for software
Exhibit 2
In due diligence
In integration
Integration is where savings and risk arrive together. Combining two estates creates duplicate tools to consolidate and larger volumes to negotiate with, but also users working under contracts that do not cover their legal entity.
Exhibit 3
01Decide who holds each license
Map every agreement to the legal entity that will hold it going forward.
Capture combined volume in negotiations. See co-terming.
04Talk to publishers early
Where consent is needed, ask proactively rather than waiting to be asked.
In divestitures
01Transition services
Allow the divested business to keep using software for a defined period, where the licenses permit it.
02New agreements
Plan the divested business's own contracts before the transition period ends.
03Reduce the parent's licenses
Once users have moved, so the parent stops paying for them.
How MI One helps
Frequently asked questions
Do software licenses transfer automatically in an acquisition?
Not always. It depends on the contract's assignment terms and the transaction structure. Check each major agreement.
When should SAM get involved in a deal?
During due diligence. Licensing costs discovered after closing are harder to negotiate.
Are publishers more likely to audit after a deal?
Transactions change licensing positions, and publishers are aware of that. Prepare as if a review is likely.
See where your software budget goes
Bring your five largest vendors to a 30-minute call. Our SAM experts will show you where the savings usually hide, and how fast MI One can surface them.
