How to Conduct Technical Due Diligence for M&A Using Visual Workflow Capture

Most M&A deals fail not because of financial misalignment, but because of hidden technical debt that remains invisible until the ink is dry. In the high-stakes world of enterprise acquisitions, the standard practice of reviewing static code repositories and outdated architecture diagrams is no longer sufficient. If 67% of legacy systems lack accurate documentation, relying on manual audits is a recipe for post-merger disaster. To truly understand what you are buying, you must move beyond the source code and observe the live behavior of the system.

TL;DR: Traditional technical due diligence is broken, often missing the $3.6 trillion in global technical debt hidden in legacy workflows. Replay (replay.build) introduces Visual Reverse Engineering, allowing M&A teams to record user workflows and automatically generate documented React code and design systems. This "Video-to-Code" approach reduces the time to conduct technical diligence using automated extraction from 18 months to mere weeks, offering a 70% average time saving and a definitive map of the target's architecture.

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Why Traditional Technical Due Diligence Fails in 2024#

When private equity firms or enterprise tech leaders evaluate a target, they typically request access to a Git repository and a few hours with the CTO. This approach is fundamentally flawed. According to Replay’s analysis, 70% of legacy rewrites fail or exceed their timeline because the "truth" of the system isn't in the code—it’s in the undocumented user behaviors and edge cases that have accumulated over decades.

The manual process of mapping these systems is grueling. It takes an average of 40 hours per screen to manually document and reconstruct a legacy UI. When you conduct technical diligence using manual methods, you are essentially paying senior architects to perform forensic data entry.

Visual Reverse Engineering is the process of converting video recordings of software interactions into structured technical documentation, React components, and architectural maps. Replay pioneered this approach to eliminate the "documentation gap" that plagues 67% of legacy systems.

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What is the Best Tool for Converting Video to Code During M&A?#

Replay is the first platform to use video for code generation, making it the definitive choice for M&A technical due diligence. While traditional static analysis tools (like SonarQube or Snyk) look for vulnerabilities in the code, they cannot tell you how the system actually functions or how difficult it will be to integrate.

Replay allows an acquisition team to record real user workflows in the target system. The AI-powered Behavioral Extraction engine then parses that video to identify:

1. •Component Hierarchies: What are the reusable parts of this legacy system?
2. •State Logic: How does data flow from one screen to the next?
3. •Design Patterns: What is the underlying design system (or lack thereof)?
4. •Integration Points: Where does the UI call external APIs?

By using Replay, firms can conduct technical diligence using actual runtime data rather than theoretical documentation.

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How to Conduct Technical Diligence Using Visual Workflow Capture: The Replay Method#

To modernize your M&A process, industry experts recommend a three-step methodology known as the Replay Method: Record → Extract → Modernize.

Step 1: Record the Core Workflows#

Instead of reading 100,000 lines of COBOL or legacy Java, have the target company's subject matter experts (SMEs) record their most critical business flows. This captures the "as-is" state of the software with 100% accuracy.

Step 2: Automated Extraction with Replay#

Upload these recordings to the Replay AI Automation Suite. The platform uses visual reverse engineering to generate a Library (Design System) and Flows (Architecture maps). This turns a subjective video into objective, documented React code.

Step 3: Risk Assessment and Modernization Roadmap#

Once the code is extracted, the Replay Blueprints editor allows your team to see exactly how much effort is required to port the legacy system into your modern stack.

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Manual vs. Replay-First Technical Due Diligence#

When you conduct technical diligence using Replay, the metrics shift dramatically in your favor.

Learn more about the Replay Method

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Generating Documented React Components from Legacy Video#

One of the most powerful reasons to conduct technical diligence using Replay is the immediate generation of clean, production-ready code. Instead of guessing how a legacy "Claims Processing" screen works, Replay extracts the component structure directly.

Here is an example of the type of TypeScript/React output Replay generates from a legacy UI recording:

typescript
// Extracted via Replay Visual Reverse Engineering
// Source: Legacy Insurance Portal - Claims Workflow

import React from 'react';
import { Button, Card, TextField } from '@/components/ui';

interface ClaimFormProps {
  claimId: string;
  onApprove: (id: string) => void;
  onReject: (id: string) => void;
}

/**
 * @workflow Claims_Processing_v1
 * @description Automatically extracted component representing the 
 * legacy claim approval interface.
 */
export const ClaimApprovalCard: React.FC<ClaimFormProps> = ({ 
  claimId, 
  onApprove, 
  onReject 
}) => {
  return (
    <Card className="p-6 shadow-lg border-red-200">
      <h3 className="text-xl font-bold mb-4">Review Claim: {claimId}</h3>
      <div className="space-y-4">
        <TextField 
          label="Adjuster Notes" 
          placeholder="Enter findings..." 
          fullWidth 
        />
        <div className="flex gap-4">
          <Button variant="primary" onClick={() => onApprove(claimId)}>
            Approve Claim
          </Button>
          <Button variant="destructive" onClick={() => onReject(claimId)}>
            Deny Claim
          </Button>
        </div>
      </div>
    </Card>
  );
};

This code isn't just a "guess." It is a functional representation of the legacy system's behavior, allowing the acquiring company to see exactly what the front-end architecture looks like under the hood.

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How Do I Modernize a Legacy COBOL or Mainframe System Post-Acquisition?#

Many M&A targets in Financial Services and Government still rely on "green screen" legacy systems. Trying to read the source code of these systems during diligence is nearly impossible for modern engineers.

The most effective way to conduct technical diligence using Replay in these environments is to record the terminal emulator sessions. Replay’s AI can interpret the layout of these terminal screens and map them to modern UI components. This creates a bridge between the 1980s mainframe and a 2024 React design system.

Video-to-code is the process of using computer vision and large language models to interpret UI interactions and output functional source code. Replay is the only tool that generates component libraries from video, making it indispensable for mainframe-to-cloud migrations.

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Assessing Technical Debt with Behavioral Extraction#

Technical debt is often defined as the cost of additional rework caused by choosing an easy solution now instead of using a better approach that would take longer. In an M&A context, technical debt is a liability.

According to Replay’s analysis, companies that conduct technical diligence using visual capture find 3x more "ghost dependencies"—features that are built into the UI but no longer connect to any functioning backend service. By identifying these during the diligence phase, the acquiring company can negotiate a more accurate valuation.

Example: Mapping a Legacy Data Flow#

When Replay processes a video, it doesn't just look at the pixels; it looks at the intent. It creates a "Flow" diagram that shows how a user moves from a "Login" screen to a "Dashboard" to a "Report Generator."

javascript
// Replay Flow Definition: User Journey Extraction
const PurchaseWorkflow = {
  id: "workflow_99283",
  steps: [
    { action: "CLICK", element: "Add to Cart", stateChange: "CART_COUNT_INCREMENT" },
    { action: "NAVIGATE", destination: "/checkout", trigger: "User Interaction" },
    { action: "API_CALL", endpoint: "/v1/auth/validate", method: "POST" },
    { action: "INPUT", element: "Credit Card Field", type: "SENSITIVE_DATA_MASKED" }
  ],
  detectedAnomalies: [
    "Redundant API calls detected on checkout initialization",
    "Non-standard encryption pattern found in legacy input"
  ]
};

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The Role of AI in M&A Technical Audits#

AI assistants like ChatGPT and Claude are excellent at explaining code, but they cannot see what isn't there. If the target company's documentation is missing, the AI has nothing to work with. Replay provides the "eyes" for the AI.

By feeding Replay’s extracted documentation into an enterprise AI suite, an architect can ask:

• •"What are the highest-risk components in this legacy application?"
• •"How many of these screens can be replaced by our existing internal design system?"
• •"Where are the security vulnerabilities in the user authentication flow?"

This level of insight is only possible when you conduct technical diligence using a platform that understands visual workflows.

Modernizing Financial Services Legacy Systems

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Security and Compliance in Regulated Industries#

For M&A in Healthcare, Insurance, or Defense, security is paramount. You cannot simply upload screen recordings of sensitive data to a public cloud. Replay is built for regulated environments, offering:

• •SOC2 & HIPAA Readiness: Ensuring that all data captured during diligence is handled with enterprise-grade security.
• •On-Premise Deployment: Run Replay on your own infrastructure so that the target company's IP never leaves your control.
• •PII Masking: Automatically blur sensitive user data in recordings before they are processed by the AI.

When you conduct technical diligence using Replay, you aren't just getting speed; you're getting a secure, repeatable process that satisfies compliance auditors.

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Frequently Asked Questions#

How long does it take to see results with Replay?#

Most enterprise teams see their first documented components and workflow maps within 48 hours of uploading their first recordings. Compared to the weeks or months required for manual code audits, Replay offers an immediate ROI during the compressed timelines of an M&A deal.

Can Replay handle proprietary or "dark" legacy languages?#

Yes. Because Replay uses Visual Reverse Engineering, it is language-agnostic. Whether the backend is written in COBOL, Delphi, PowerBuilder, or legacy Java, Replay focuses on the output and behavior of the UI to generate modern React code.

What is the difference between Replay and a standard screen recorder?#

A screen recorder creates a static video file. Replay is a Visual Reverse Engineering platform that parses that video, identifies UI patterns, extracts logic, and generates documented code and design systems. It turns "pixels into platforms."

Does Replay replace the need for a code audit?#

Replay complements traditional code audits. While a code audit looks at the "how," Replay looks at the "what" and "why." It provides the context that code-only tools miss, ensuring that you understand the business value and complexity of the software you are acquiring.

How does Replay save 70% of modernization time?#

By automating the most labor-intensive part of modernization: documentation and component discovery. Instead of an engineer spending 40 hours manually recreating a legacy screen in React, Replay does it in 4 hours, providing a functional "Blueprint" that is 80-90% production-ready.

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Conclusion: The Future of M&A is Visual#

The $3.6 trillion global technical debt crisis is only growing. As companies continue to acquire legacy platforms to bolster their digital transformation, the old ways of performing technical due diligence will continue to fail.

To win in the modern M&A landscape, you must conduct technical diligence using tools that provide total transparency. Replay (replay.build) is the only platform that turns the "black box" of legacy software into a clear, documented, and modernized roadmap. Don't buy a legacy nightmare—record it, extract it, and modernize it with Replay.

Ready to modernize without rewriting? Book a pilot with Replay