“Digitalization is the inevitable future of M&A for companies looking to acquire aggressively for growth and profitability.”
For multinational corporations, acquisitions have been a significant source of expansion and transformation. Despite this, up to 70% of negotiations fail to achieve their objectives. With annual volume approaching USD 5 trillion and 100,000 deals, we should be concerned with the overall deal mechanism rather than individual failures.
The M&A process and leadership aren’t necessarily well-structured, unbiased, or straightforward. Instead, deals are often led under a veil of secrecy, and progress is contingent on the deal leader’s heroic actions and wise decisions. The M&A process, like any other extensive business process, should be well established and backed up by a purpose-built information system.
What do we mean when we say a ‘smart’ M&A platform?
Through the passage of time, the traditional approach to running an M&A process is destined for the museum archives. Imagine piecing together several non-dedicated tools – such as Excel Spreadsheets, Word documents, PowerPoint presentations, mountains of paperwork – and reinventing the wheel for each deal process in the absence of any lessons learned from previous transactions. Technology is transforming M&A processes in today’s deal-making, and it’s on the way to being the new standard.
When we say a ‘smart’ M&A platform, we indicate using digital methods to revolutionize the deal process and discard all the tedious traditional time-consuming techniques for your M&A deal. A Digital M&A Platform is characterized by a better way of operating that is facilitated by technology. It helps in streamlining information and simplifying the deal management process. Goals, intentions, decisions, challenges, and risks are all communicated more effectively. All the departments involved in the deal can collaborate and perform in real-time, thereby making it easy to share information and best practices. Relevant information is readily accessible at any time and from any place. Advanced dashboards and analytics allow teams to spend less time in monitoring and reporting and more time focusing on what matters most to them.
A Digital M&A Platform is distinguished by its ease of use and streamlining the complete user experience which usually is a complex operation. A Digital M&A Platform would not necessarily entail hiring many in-house consultants or undergoing extensive preparation. Although there would be a learning curve when moving from an “Analogue” way of operating to a smart or a digital M&A Software, the intuitiveness of a Digital M&A Platform means that a deal team will automate and digitize their M&A process from the start, allowing them to maintain a level of transparency that the companies would require within their deal.
Why do you need a smart M&A platform?
Traditionally, firms have used a variety of methods to execute M&A deals. Consider a company with several departments around the world, where each team uses a particular platform to store records, handle activity lists through a project management tool, and so on. It is not easy to get an integrated view in such a situation, where one has to consolidate the entire deal’s information across counties and reports.
Most acquirers who are often on acquisition sprees make significant errors by failing to leverage lessons learned from previous deal success or failures. The fundamental explanation behind most such cases is that they do not have a purpose-built platform to record all transaction information, store documents centrally, identify strategy templates, define playbook templates, and have all the teams access relevant information as required by the deal. In such a scenario, a smart M&A Platform can be a one-stop solution to all your problems and streamline the user experience without any extensive preparation.
How will the digital tools energize your Key M&A process?
- Centralized & Engaged communication: Companies can securely communicate with internal and external stakeholders during the deal transaction by using a digital M&A platform, which facilitates streamlined and engaged collaboration. During the pre-deal period, there is a significant confidential communication between the buyers and sellers’ teams and other parties such as bankers and law firms’ associates about various operational activities, and hence the need for access to many confidential records becomes vital. In such a situation, a digital platform proves to be a boon. It can help connect all of these operations in a streamlined manner, thereby allowing all parties to exchange information controlled by the platform features.
- Smooth Handover process & Document Management: Often, the team directly involved in the deal’s transaction process does not communicate well with the integration teams, and there is no systematic handover mechanism between the groups, which is critical to the integration progress of the deal. The top risk identified by the transaction team and any other significant lesson learned must be conveyed and expressed appropriately to the integration team so that both of them can work together and reach a definitive solution to the problem. The Digital M&A tools can help manage the handover process inside the platform, allowing all critical risks and difficulties to be revisited after the operation.
- Document management is a crucial aspect of any transaction, from the very early stages of deal renegotiation to the end of due diligence and deal incorporation process. There would be many records of all types, such as pdf, word documents, video files, and so on. Due to the confidentiality of documents and access to such information, document management without using digital software is of significant concern.
- A digital M&A platform is an excellent way of keeping all of the records in one place and giving the right teams access to it as and when they need it.
- Digital playbook & Deal management: The majority of the companies will have a dysfunctional M&A playbook that will be missing documentation and lacks information on critical activities essential for the deal’s success. Companies may use an M&A software platform to easily and swiftly generate an M&A playbook that incorporates all vital mandatory tasks and deal-specific tasks. All the information regarding the deal’s activity, such as owners, risks, records, mission details, priority, and schedules, will be embedded in the playbook, allowing the team to quickly get started and identify specific initiatives as the deal progresses, as part of the project management skills functionality.
- Dashboards: One of the most common challenges that most executives and teams face during a deal is the lack of reliable and accurate details. At times, it is almost impossible to obtain real-time data which is accessible without M&A software. Most senior executives spend much time preparing for different exercises related to information collection nearly every month before reporting.
- Most users on the M&A software platform get a dedicated dashboard based on their role and deal access level, which solves this issue effectively. On the dashboard, an executive sponsor can see most of the deal’s main information pertaining to his position. In contrast, a junior member of an M&A team can see which deal he is assigned to work on and all the relevant information that would be required for anyone with a similar position as him.
- Post-acquisition Performance Management: Post-closing of the deal, a detailed picture of actual performance vs. business plan can be used to monitor the success of a deal’s execution. M&A digital platform assists M&A controllers in defining a single collection of comparable post-acquisition performance metrics that provide relevant stakeholders with a succinct and detailed view of transaction performance. M&A operators can enter data once in the platform and secure it to make it a baseline and enter actual achievement per quarter to monitor planned vs. actual achievement. Not only this but via the M&A Software, an overview report can also be run and used by relevant members and the steering committee to compute variances from the business strategy and consolidate feedback from the integration manager.
Digitalization is the inevitable future of M&A for companies looking to acquire aggressively for growth and profitability. MergerWare is a world-leading platform that virtualizes and digitizes our Fortune 500 customers’ entire M&A operation and helps them in speeding up their merger execution and overall deal success rates.
MergerWare’s all-in-one smart M&A software makes it simple to fine-tune layouts based on industry information and lessons learned, giving teams an end-to-end approach for deal management transactions and similar organizational growth actions. Usage of the digitized and automated digital platform enables teams to dramatically minimize the high administrative workload usually associated with M&A and drive productivity across a deal.
MergerWare takes immense pride in being acknowledged as the best-in-class M&A software, developed by M&A professionals with decades of M&A integration experience, including developing comprehensive M&A playbooks through the merger life cycle, establishing integration strategies, teams, and driving deal value, development targets, and acquisitions across several billion dollars.
Our revolutionary technologies are breaking down the obstacles to M&A growth and expansion. Companies that want to stay afloat and grow must adopt digitalization and technology to manage their transactions, and we’re here to connect and help them with all of their digital needs.
Is your company’s M&A structure incomplete and poorly organized across various departments?
Are you looking for a solution that is tailored to you and your team’s needs?
Our consultants and experts can assist you in creating and organizing your M&A playbook, or we can offer our playbooks which can be customized to suit your needs!