Open Source Software in Merger and Acquisition Transactions

March 7, 2006 Advisory

From general ledger systems to warehouse management applications, businesses large and small are dependent on information technology. As a result, understanding the license rights underlying such technology is a critical component of the due diligence process in every merger and acquisition transaction. The considerable growth of so-called open source software has further complicated that analysis. This article explains the meaning of " open source" software, highlights the risks and benefits of using such software, and provides suggestions for managing these risks in the specific context of a merger and acquisition (M&A) transaction.