Questions IT Service Company Buyers Should Be Asking

As a buyer, it is easy to focus on the financial aspects of acquiring another company. What is their revenue and profit? How much debt does the seller have? Can I buy at a fair or lower price than other recent deals? These are all good questions.

Buyers may seek to add delivery capacity, technical skills, customer relationships, or geographic reach. Assess those objectives alongside the financial review: identify who will lead integration, what depends on the target team, and which resources and commitments are required. Timing, savings, and seller proceeds depend on the specific transaction and its execution.

Play it Smart

Given specific criteria like target company size and country locations under consideration, there are still many questions to answer to minimize the effort of sourcing qualified targets and increasing the chances of a successful acquisition.

There are three key areas that must be explored:

• Business model
• Skill verification
• Scalability

There are two major business models for IT service companies hired for digital transformation and custom software development: staff augmentation and autonomous teams. Staff augmentation, or team extension, is where the IT service company recruits the developers who are then directed by the customer.

They become part of the customer's technical teams and work remotely. The autonomous team model is a more complete service where the customer interacts primarily with the remote team leader (and the entire remote team when needed). The outsourced team takes more responsibility to deliver custom software, often from user experience (UX) design to testing and deployment of the software in the cloud.

Verifying Claims

Acquiring a company with a compatible business model can support the buyer’s intended client engagements. An autonomous-team buyer could also acquire a staff augmentation company to expand its developer capacity. Compare fully loaded delivery, recruitment, retention, tooling, and transition costs in the actual markets involved before assuming savings.

Verifying the skills of the IT service target requires a complicated set of questions. For example, if the target's website says they are expert at AI and machine learning, how can you know for sure?

Of course, it is easier to perform this check if the acquirer has the same expertise and knows what to ask. If not, then careful reference checking should be performed with the target's customers using the desired technical skills. Also, the level of professional expertise among the team's staff is often on full display by reviewing the company's published content and thought leadership.

Finally, the scalability of the target is its ability to continue to grow and recruit additional developers in the market where they are located to meet the needs of the acquirer. Questions about how candidates are sourced, interviewed, and selected should be asked.

Growth Strategy

Are they mainly recruiting from local universities or other IT employers in the area? A focus on university recruitment is fine but needs to be accompanied by training programs to give new developers the skills needed to work on a remote team with English as the primary language.

The acquirer must do their homework to define their goals and important criteria required to make a good acquisition. A clear definition of success using these three key areas will eliminate the wrong targets and, through these steps, identify the real jewels.

A documented example is Nortal’s December 2025 update after acquiring Nearsure. Nortal reported that Nearsure had rebranded and that the leadership teams had merged. Those are concrete integration steps to discuss with a prospective target, alongside the buyer’s plan for customers and delivery. Read Nortal’s rebrand and leadership update.

Otherwise you may settle for what looks like a good financial deal in the beginning only to spend more time and energy than necessary after acquisition.