A Rationale for M&A Technology
Most of today’s Merger and Acquisition activity is conducted using processes that, while still adequate, do not take advantage of current technology. In my previous article in June 2014 “Art to Science”, I opened the discussion relating to the move away from a single person with the company’s institutional memory and expertise in Merger, Acquisition and Integration. While expertise is extremely important, the size and scope of today’s transactions require a fundamental shift to a team approach with a comprehensive and repeatable M&A process utilizing a formal methodology.
As always, the time to complete the transaction and fully integrate it into the company is a compelling pressure. This element of timeliness is pitted against the more highly complex transactions of current M&A activity. As such, the necessity for a formal, comprehensive M&A methodology and disciplined process has become increasingly more mandatory. Serial acquirers need to implement state of the art tools and processes that provide the M&A professionals with the means to efficiently conduct several, concurrent acquisitions and integrations. And the multiple teams managing and implementing the various aspects of a transaction require access to and an understanding of the whole process, while engaged on only one phase or issue of a project.
A Secure Virtual Data Room provides a repository for tracking documents, worksheets, and comments. But, it does not provide a methodology or process to be followed for the due diligence. The advantages of automating a detailed due diligence process are now being recognized. Today’s customizable, automated M&A process systems allow the download of information and the reviewer’s comments. In addition, the technology ensures management of the process, and tracking of the transaction’s progress and resource utilization. Also, the collaborative aspect of these systems allows time sensitive information to be shared with internal and external team members for quick issue resolution.
By implementing a sophisticated M&A software system, team members can master specific aspects of the process without becoming experts in the full range of M&A issues and topics. Multiple M&A deals, at various stages in the M&A process, may be summarized, reviewed and managed more thoroughly and effectively. Within these M&A systems, Gantt chart scheduling of resources can be planned, monitored and modified as necessary. Personnel schedule planning and management of scarce resources are maximized. Critical, timely management reports on multiple transactions are facilitated, with drill-down capability to specific problems areas or concerns. The flexibility of the system’s platform allows high mobility for all team members, thereby providing the ability to be in constant contact with others assigned to the project. Outside professionals, financial consultants and technical experts are always necessary to provide input to the overall M&A process. Secure M&A software systems allow each of these experts to participate in the process by sharing in the deal’s confidential, private communication network.
These new M&A software systems utilizing current technology allow the M&A professionals to increase the effectiveness and span of their knowledge and skill. Team training is more efficient and consistent with the corporate M&A methodology. The team member’s work can thereby be effectively managed against standards and timelines. And importantly, completed M&A projects can be brought on-line faster and within budget.