Chapter 1. Introduction
This document is a translation of Open Source Audits in Merger and Acquisition Transactions (by Ibrahim Haddad, 2018), published by the Linux Foundation. The original author has not reviewed this translation. The original can be viewed at the original PDF.
We live in a software-defined era. Nearly everything we do is in some way planned, shaped, analyzed, and managed by software. Under that vast software umbrella, open source software stands foremost. Companies across every industry are rushing to use, participate in, and contribute to open source in order to capture the various benefits open source projects offer. Those benefits range widely, from tapping external engineering resources that shorten time to market, to faster innovation.
This trend applies equally to corporate transactions, since nearly every technology acquisition involves software in some form. The software due diligence process, in which the acquirer comprehensively reviews the target company’s software and compliance practices, has now become standard procedure in every merger and acquisition (M&A). Open source software is commonly encountered in this process, and it presents verification challenges different from those of proprietary software.
This material looks at an overview of the open source audit process conducted in merger and acquisition (M&A) transactions.