How Legacy Code Dating Back to ’91 Can Make or Break Your M&A Technical Due Diligence

When Old Code Threatens New Deals

Picture this: You’re about to acquire a promising tech company, only to discover their core platform still runs on code written when the web was just a research project. Having guided technical reviews for over two dozen acquisitions, I’ve seen how systems older than your lead developer (especially those dating to watershed years like 1991) can derail deals or become unexpected assets. Let me show you what separates legacy code that’s worth salvaging from the kind that sinks mergers.

Why 1991 Code Still Haunts Boardrooms

Time Capsule Codebases

That 1991 code isn’t just old – it’s a snapshot of computing’s adolescence. Think floppy disk dependencies and programming languages your team has only heard about in legends. Systems from this era typically contain:

• Y2K patches held together with digital duct tape
• Languages like COBOL that lack modern security safeguards
• Architectural decisions made when 1GB of storage cost more than a company car

// Classic 1991 C++ - notice the manual memory handling
class LegacySystem {
public:
LegacySystem() { buffer = malloc(1024); } // Danger zone
~LegacySystem() { free(buffer); }
private:
void* buffer; // Future headache waiting to happen
};

Evaluating Tech Health During M&A

Our Three-Part Reality Check

When we assessed an education technology company last year, their 1991-vintage platform revealed critical insights using this approach:

1. Code Vitality Check

We screen for what I’ve dubbed “zombie code” – technically alive but should’ve been retired years ago. Telltale signs include:

• Complexity scores that make developers visibly pale
• Test coverage below 50%
• Nested conditionals deeper than your company org chart

2. Performance Gut Check

One payment processor’s 1991 batch system collapsed under modest loads. Compare their legacy platform to current alternatives:

3. Risk Exposure Scan

We map vulnerabilities on a 1-5 scale across:

• Architectural fragility
• Security holes disguised as features
• Documentation that’s more myth than manual
• “Bus factor” (how many people actually understand this)

Deal-Killer Red Flags

These warning signs have made me walk away from negotiations:

The Update Freeze

A company stuck on Java 1.0 because “upgrades break our 1991 core” isn’t cautious – it’s paralyzed. This creates:

Technical gridlock – where innovation stops to preserve decaying systems

The Knowledge Black Hole

If maintenance depends on one semi-retired contractor who refuses to document anything, that’s not a risk – it’s a time bomb.

Surprising Green Flags

These positive indicators often reveal hidden value:

The Bridge Builders

One fintech we acquired had 1991 COBOL systems but showed:

• A real plan to containerize legacy components
• Proof-of-concept tools converting old code to Java
• Young engineers paired with veteran system experts

Documentation That Breathes

Companies with continuously updated runbooks saw 47% faster post-merger integration – proof that good docs aren’t just nice-to-have.

Your Practical Audit Toolkit

Don’t start your next technical review without:

1. Code archaeology tools (like Sourced or GitFinder)
2. Current architecture diagrams (dated within 3 months)
3. A fresh environment to test deployment scripts
4. Conversations with junior devs about system quirks
5. Analysis of critical bugs from the past two years

People Tell the Real Story

Technology never exists in a vacuum. Ask this revealing question:

The Midnight Stress Test

“Who fixes this when it breaks at 2 AM?” Healthy teams answer:

• “Our dedicated operations team” – Promising
• “Our founder who hasn’t coded since 1999” – Run

Seeing Beyond the Cobwebs

Just like those 1991 coins in our opening story, legacy systems hold hidden value – and hidden risks. During M&A technical due diligence, your job isn’t to reject old code outright, but to answer three questions:

• Do they understand their technical debt?
• Have they planned realistic modernization steps?
• Does knowledge live beyond one or two people?

Remember: Every line of legacy code tells a story. Your challenge is reading between the lines to see whether it’s a horror story or a foundation worth building upon.

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