Technology & Innovation In Private Finance: M&A Collaboration Tools and Smart Working

January 12, 2024

Content series about the biggest trends shaping private finance


Over the past months we have discussed the top of mind areas of machine learning and AI, yet potentially the most impactful technologies driving disruption in the M&A industry, are those focusing on collaboration and smart working. 

The current tooling around private finance transactions is very fragmented, using different software for pipeline tracking, data sharing, project management and reporting. This creates data silos and limits the possibility of using data to its full potential. As the industry increasingly turns to technology solutions, collecting and managing data in a better, more scalable and standardised manner is one of the first areas to be improved.

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Fragmentation Stops Progress

One of the first problems within many M&A teams is managing their pipeline. In the fast moving, relationship driven world of M&A, different team members use different tools ranging from notebooks to spreadsheets to CRMs to record leads and the communication that occurs. Consistency in the data collected is often lacking. Starting the data collection process for each client in an inconsistent manner is sure to cause issues down the line. Unfortunately, the majority of modern CRM tools available in the market are focused towards sales teams and tend to be overly complex for this use case. As a result, busy M&A professionals often see updating the CRM as an additional chore and skip it. Consequences will vary in severity - contacting the same target twice or not knowing the history with the target will make the originator look unprofessional, and forgetting to follow up with a target will potentially result in a missed deal. Data collection needs to be manageable in size in order to stay consistent. Any hurdles from the collection of data need to be removed - integrations to email, automated data extraction, and a modern simple UI are possible solutions.

Once a deal is underway, sharing of highly confidential data, including financials and contract agreements much of which may constitute MNPI, is a key concern. While secure virtual data rooms (VDR) have been around for a while, their usage has been limited to external collaboration. Typically data is dumped to a local or company drive and the data room is not visited and is often closed after a transaction has been completed. Data that has been dumped to a local or company drive in an inconsistent format will often stay as that. To move into the modern data driven world, this information needs to be indexed, accessible, and searchable.

Further, in corporate M&A transactions, post execution integration pulls in a large number of employees (often c. 50 or more), ranging from HR tasks, to operational to legal, often with the individuals not having worked on a similar project before. Effectively managing these large cross-office teams is critical for the success of the project, and may have an impact for many years to come if not completed well. While tools for managing multiple teams exist, there are specific requirements for M&A that need to be considered - these large projects are constantly evolving, and while the baseline steps to execute always remain the same, nuances in every transaction exist. In large integration projects, the tasks’ context and timelines need to be communicated very clearly - complications arise from the ever changing priorities, staff’s lack of understanding of the big picture, and collaboration between multiple offices and regions. Remote working has made the problem only expand. Only purpose built technology can effectively tackle these issues in a scalable manner.

Value in Integration

Combining data collection into an end-to-end system provides a host of benefits. One of the key value propositions for leaders is visibility and the ability to manage teams effectively. In simple terms this can come from data visualisations such as real time dashboards and reports, or simply better visibility of active projects and pipeline. A further benefit comes from the development of a widely accessible “corporate memory” ensuring data and information isn’t lost in emails, local hard drives or in people's heads. With the advent of modern search technologies, including natural language search, data can easily be checked and found, saving hours of wasted time trying to find the right person to answer a question, and allowing work to be quickly and efficiently re-used. Finally, with advanced solutions, it is possible for users to receive guidance on next steps, allowing for a lot of the manual work to be automated. This of course requires a highly specialised solution with relevant data. Taking off a lot of the workload from busy supervisors can unlock massive inefficiencies in these projects, particularly on the integration side.

Key Technology Benefits

As the M&A industry integrates more smart working tools, we see the key benefits coming in the following areas: 

  1. Automating parts of middle management supervision and project management with clear real time reports to quickly uncover bottlenecks, and with smart next step suggestions allowing team members to become more proactive independently
  2. A long standing “corporate memory” of all data in a transaction, allowing for in-depth analysis and comparison of past transactions (using, for example generative AI or other machine learning models)
  3. Streamlined pipeline tracking, integrating to emails and other communication tools to track all conversations and data about a target 

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Authors: Matthew Jones, Heini Salonen

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