M&A analytics: Breakthrough insights, better deals

Digital technologies like AI and data analytics are transforming the M&A deal cycle. Digital analytics is a tool fit for the time, as M&A becomes a more frequent, regular part of companies’ business agenda. A robust M&A function is fast becoming a norm for leaders, with AI and analytics as rocket fuel for speed and new capabilities.

Not only do analytics bring greater speed, they also increase accuracy and free humans to do what they do best while AI handles the rest. The new M&A requires a mindset shift in which company leaders embrace the agile and innovative, adding machine logic, speed and intelligence to the human version of all three. Marrying humans and machines creates a more whole-brained version of M&A, backing intuition with science.

Many potential targets are smaller, private and harder to identify using traditional techniques. With robust data sets and machine learning tools, companies can create a set of acquisition possibilities that bring the capabilities they’re looking for in-house. And they can do so in a significantly shortened timeframe and at lower cost. Automated target screening tools allow web interfaces to quickly develop customized search criteria. Analyst teams can identify thousands of targets, shortlisting using weighted criteria and Natural Language Processing (NLP), to reduce time spent from traditional methods by 50 to 60 percent.

Additionally, new targeted AI-powered apps allow M&A teams to rapidly ingest and normalize large data sets, with the processing power to evaluate multiple potential scenarios at speed. Armed with this information, C-suite leaders and their teams can identify more sources of value from the transactions they execute, while predicting more accurately the value to be attained.

In today’s environment, as deals get larger and more complex, calculating value with accuracy requires more data to evaluate, more integration options to test, more sources of value to factor in and weigh against each other.

Analytics is already helping leadership teams better determine the value of a deal by broadening the number of factors that can be screened. This larger picture means deal teams can create a more accurate model when deciding whether to proceed with any one target.

When a deal does move ahead, digital tools now allow companies to download their HR databases into a confidential, clean environment to design the new organization and remap talent, factoring in titles, levels, salaries, skills and more. Rather than struggling with hundreds of spreadsheets, leaders can see synergies and savings holistically and almost instantaneously.

Companies want to hit the ground running from deal close on, versus drawn-out integrations. From designing roles and identifying who will fill them, to what gets automated, to analyzing terabytes of unstructured data for contract terms around costing or change of control provisions, analytics can achieve in minutes what used to take weeks or months.

For example, we recently helped a large life sciences company with a divestiture. The company’s systems were filled with intellectual property (IP). It needed to identify which pieces belonged with the divestiture and which the larger company needed to retain. What used to take months—executing searches over large volumes of unstructured content—took just six days using AI.

In short, any merger or acquisition is disruptive to business. Analytics tools allow your company to get to the desired target state sooner and with less risk, which means getting back to the business of your business faster.