6 IT Asset Management Takeaways for Mergers, Acquisitions, and Divestitures

Mergers, acquisitions, and divestitures can introduce software licensing complexity long before technology integration or separation begins. Contract restrictions, inherited compliance exposure, publisher requirements, duplicate software, and unclear license ownership can all affect the cost and complexity of a transaction.

That makes Software Asset Management (SAM) and IT Asset Management (ITAM) an important part of M&A planning.

During our recent webinar, IT Asset Management Best Practices for Mergers, Acquisitions, and Divestitures, Anglepoint experts Sarah Marriott and Poppy Gacke shared how organizations can better manage software licensing risk and identify optimization opportunities throughout the M&A lifecycle.

One message came through clearly: ITAM needs to be involved before the deal closes, not after. Early involvement gives teams more time to understand licensing implications, review contractual obligations, and identify potential risks while there are still options available.

Here are six key takeaways from the webinar and what ITAM, SAM, and procurement teams should consider when navigating a merger, acquisition, or divestiture.

1. ITAM Needs a Seat at the Table Before the Deal Closes

One of the most important factors in managing software during M&A is timing. Organizations typically have experienced teams managing transaction strategy, due diligence, valuation, legal requirements, and integration planning. But ITAM is not always included in those conversations early enough. That matters because software licensing decisions made before close can have significant implications afterward.

For an acquisition, the organization may inherit software deployments, contractual obligations, and software license compliance risks that weren't fully visible during due diligence.

For a divestiture, teams may need to determine which licenses can move with the new entity, which must remain with the parent organization, and how software can continue to be used during the transition.

Early ITAM involvement gives teams more time to identify licensing exposure, understand contractual obligations, and address issues before options become limited.

2. Acquisitions and Divestitures Create Different Software Licensing Challenges

Although mergers, acquisitions, and divestitures are often grouped together, the ITAM requirements are not the same. With an acquisition, you're absorbing an unknown.

The acquiring organization needs to understand what software it is inheriting, where compliance gaps may exist, which technologies overlap with its existing environment, and how contracts should be consolidated.

That can include:

• Inventorying inherited software
• Identifying compliance gaps
• Reviewing publisher agreements
• Deduplicating applications and products
• Completing publisher notifications
• Negotiating consolidated agreements

With a divestiture, you're separating something that grew together.

Organizations need to determine which licenses are associated with the divested business, which remain with the parent, and which may not be easily separated.

They also need to manage license allocation throughout the transition and confirm that access and deployments have been appropriately addressed once the transition ends.

Despite these differences, both scenarios require complete license visibility, disciplined software license management, contract expertise, and proactive ITAM involvement.

3. Software Publishers May See M&A as a Commercial Opportunity

An M&A event changes more than the relationship between two organizations. It can also change the organization's relationship with its software publishers.

Publishers may view a merger, acquisition, or divestiture as an opportunity to reassess existing agreements and commercial terms.

There are four areas ITAM teams should pay particular attention to.

Notification requirements. Many enterprise software agreements include change-of-control or assignment provisions that may require notification or publisher consent when a qualifying transaction occurs.

License transferability. Licenses do not necessarily transfer automatically when a business changes ownership. Existing contract terms need to be reviewed before assuming entitlements can move between legal entities.

Audit exposure. M&A activity can increase software audit exposure. Publishers may monitor publicly announced transactions, and audit activity can occur even after a transaction has closed.

Repricing. Expanded user counts, new geographies, organizational changes, or different use cases may create an opportunity for publishers to revisit pricing and commercial terms.

Understanding these provisions before publisher discussions begin can put ITAM and procurement teams in a stronger position.

4. Complete Software License Visibility Is Critical

Complete software license visibility is essential during M&A. When webinar attendees were asked about their biggest ITAM challenge during a merger, acquisition, or divestiture, lack of visibility was the leading response, followed by compressed timelines.

If an organization doesn't have an accurate understanding of its software estate before an M&A event begins, teams may have to establish that baseline while simultaneously managing integration activities, contractual deadlines, and publisher requirements.

An M&A-ready ITAM program, anchored in strong entitlement management, should be able to answer:

• What software is deployed?
• What licenses and entitlements does the organization own?
• Where are those licenses being consumed?
• Which business units or entities are using them?
• Where are potential compliance gaps?
• Which publishers represent the greatest financial or contractual exposure?

Maintaining an accurate license position can also make divestitures easier by helping organizations understand software consumption at the business-unit or entity level. One health insurer managing multiple acquisitions and a divestiture cut its identified Oracle risk by 97% — from $9.7M to $217K — after moving to rolling license position reviews.

For organizations where M&A activity is part of business as usual, that visibility should be maintained continuously rather than recreated for every transaction.

Not sure how M&A-ready your ITAM program is? Take Anglepoint's ITAM Readiness Assessment to see where the gaps are before your next transaction.

5. Software Licensing Terms Should Be Built Into TSAs

For divestitures, Transitional Services Agreements (TSAs), sometimes referred to as rights to use (RTUs), can provide additional time to separate the divested organization's technology environment from the parent company.

But the existence of a TSA does not automatically resolve software licensing requirements. Software use during the transition should be explicitly addressed.

Anglepoint recommends defining six areas in publisher-specific TSA arrangements:

Scope
Clearly identify which products, quantities, or agreements are covered.

Time-bound terms
Establish a firm end date and define what needs to happen for the transition to be considered complete.

License reporting
Require visibility into software consumption throughout the TSA period so potential compliance issues can be identified and addressed.

Termination obligations
Define how deployments will be removed, license keys returned, and completion evidenced once the TSA ends.

Publisher notification
Establish who is responsible for communicating with the publisher and ensuring contractual notification requirements are met.

Audit exposure
Determine who will be financially responsible if overconsumption or another compliance issue occurs during the TSA period.

These details are particularly important because the parent organization may remain accountable to the publisher under the underlying agreement. Clear terms can help both organizations understand their responsibilities throughout the transition.

6. M&A Creates Opportunities for Optimization, Not Just Risk

M&A doesn't just create software licensing risk. It also creates opportunities to improve the software estate.

An acquisition may bring together organizations that use multiple applications for the same purpose or maintain separate agreements with the same publisher.

Once the environments are understood, organizations can look for opportunities to:

• Rationalize overlapping applications
• Reclaim unused licenses
• Consolidate publisher agreements
• Benefit from greater purchasing volume
• Improve commercial terms
• Establish more consistent software management processes

Divestitures can create optimization opportunities as well. Licenses previously consumed by the divested entity may become available for reclamation or redeployment within the remaining organization.

The webinar emphasized application portfolio rationalization as an important part of both acquisitions and divestitures. Rather than simply combining or separating everything that exists today, organizations have an opportunity to determine what the future software estate should actually look like.

Preparing ITAM for the Next M&A Event

Organizations don't need to know exactly when their next merger, acquisition, or divestiture will occur to prepare for it.

M&A readiness starts before a transaction is announced. ITAM teams should maintain accurate software and entitlement data, understand change-of-control and assignment provisions for priority publishers, identify publishers with the greatest financial or contractual exposure, and establish clear responsibilities across ITAM, procurement, legal, and M&A teams.

Organizations can also negotiate M&A protections into priority software agreements before a transaction is underway. Depending on the publisher and agreement, this can help create more flexibility if the organization later acquires or divests a business.

The goal is to make M&A readiness an ongoing part of the ITAM program rather than something teams have to build after a transaction is announced.

Build M&A Readiness Into Your ITAM Program

M&A readiness shouldn't begin when a transaction is announced. Organizations that maintain strong software visibility, understand their contractual obligations, and involve ITAM early are better positioned to manage licensing risk and identify opportunities for optimization throughout the transaction.

Anglepoint supports organizations throughout the M&A lifecycle, including publisher prioritization, contract and clause analysis, M&A due diligence, TSA structuring, negotiation support, license position assessments, ongoing risk management, and software optimization.

Preparing for a merger, acquisition, or divestiture?

Talk to Anglepoint about TSA structuring, M&A due diligence, and publisher prioritization before software licensing becomes a post-close challenge.