Poised for the Turn: Why Tech Diligence Is Critical in the Next Wave of PE Deals

Bain’s 2025 Midyear Private Equity Report uses the word “poised,” indicating the private equity sector is poised for more of the same, for continued slowdown, or perhaps for a return to deal-making. When the deals do return, it may be a tide. That means PE firms must be ready to compete and be prepared for the tide.

In working regularly with private equity sponsors and their portfolio companies, I found the report's comments on the technology diligence plan align exactly with what I am seeing. In today’s environment, private equity firms need to excel not only at creative deal-making and value creation but also at rapid and integrated due diligence. Speed matters — and that speed must extend across commercial, operational, and now, critically, technology diligence.

The technology stack you are building upon is more important than ever in determining whether deals ultimately succeed.  What you inherit with the asset on the technology stack must be deeply considered in the deal economics and post-close accelerated plan.

This is especially true for buy-and-build strategies, which have dominated the investment strategy for the past decade. Without a strong, scalable, and resilient technology foundation, the value-creation thesis falls apart.