​M&A Due Diligence: Healthcare Information Systems

NY based private equity firm which actively invests in information service sector supporting healthcare, banking, trust, securities, retirement and wealth management sectors was considering to invest in a California based healthcare service provider. 

Copperpod IP was engaged to perform due diligence to analyze the company’s technology help the private equity firm make an informed decision. Our team of experts formulated a holistic due diligence strategy covering several key exercises.


1. Code Analysis

Our source code consultants analyzed the complete source code within a short period of time. We provided in depth quantitative and qualitative analysis of the existing code. Some of the reviewing parameters considered by our experts were:


  • Size of code base

  • Comment Density and Ratios

  • Number and Ratio of Classes and Methods

  • Inactive to Active Code Ratio

  • Open Source vs. Proprietary Code Ratio

  • Quality Compliance Rates Per Developer

  • Process and system utilized by developer


Copperpod IP experts evaluated the existing products of the company to provide a detailed report on some of the functional parameters like:


  • Ease of maintenance

  • Legal protection

  • Scalability

  • Security

  • Open source liabilities

  • Patentable subject matter


2. IP Litigation Activity

Our patent litigation consultants identified past and current litigations as well as significant court verdicts that affected or was likely to affect the products, technologies and the applicable market segments of the company.


3. Functional Recommendations

Copperpod IP experts found that a significant portion of the source code developed by the company’s external contractors lacked legal copyright and trade secret notices. We recommended certain tools to automatically set up a code template with pre-filled legal terms that would prevent any future litigation and business conflicts.


Also, as an added measure, to help new developers identify who to contact for specific institutional knowledge and bug resolution our experts recommended that author(s), creation dates and a brief revision history be included as comments at the top of each source code file.


Copperpod IP also found that given the sensitive and confidential nature of their data, the company should consolidate their code into a single active and regularly backed up repository as opposed to multiple fragmented repositories. This would ensure that each checkout of code as well as data is recorded and maintained in a single secure location.


Our experts also highlighted a low comment-to-code ratio in certain product source code which places high dependency on the original author and requires a longer learning curve for new developers.


The reports and recommendations submitted by Copperpod IP on the source code and functional components of the company’s products enabled the client to make an informed decision on investing into the company and the company itself to strength their source code and data storage for the future. The multi-million dollar investment path taken by our client has led to aggressive expansion of the firm and its sales across US.


Copperpod is one of the world's leading technology research and forensics firms, with an acute focus on management and monetization of intellectual property assets. With offices in US and Asia, our global team of consultants has helped clients realize over $1 billion in revenues from patent licensing, jury verdicts and patent portfolio transactions.

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