How to use A.I. in the M&A process to gain competitive advantages

Nichole Jordan speaking at The Deal eventAt The Deal Economy Conference on middle market deal-making this fall in Chicago, I had the pleasure of sharing a stage with an impressive roster of senior executives, influential dealmakers and investors for a discussion of mergers and acquisitions.

For my presentation on how mid-market companies are leveraging A.I. to gain competitive advantages in the M&A process, I shared a cycle of intelligent technologies which complement one another to give middle market businesses an edge.

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Align Every company and situation is unique. When preparing to implement an A.I. solution, it needs to complement your business strategy. This starts with boards and management identifying what is wrong, missing or needs improvement. Are you looking to…

  • Bolster your in-house talent?
  • Attract a new customer base?
  • Break into a new geography?
  • Add proprietary technologies?

These questions need careful consideration during board meetings to fill business gaps. They’re also not one-time questions. They should make regular appearances at any executive or board meeting to make sure everyone is aligned and on the same page.

Align graphic 1 Analyze Once you’ve agreed upon the areas for improvement, you implement an A.I. solution that scans the market and returns a list of target companies for potential acquisitions. Through machine learning, these technology solutions ingest massive amounts of publicly available data – from patent filings, valuations and financial reporting to press releases, social media and customer feedback – scoring a short list of acquisition candidates matching business needs you’ve prioritized.

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Monitor Thanks to the first two steps, you’re able to conserve resources on a process consuming most companies’ human capital investment: monitoring. Through a dashboard, you’re able to see a list of target companies and scores based on how they would fill existing gaps. This is where predictive analytics come into play and you’re able to monitor changes and target patterns to predict value and risk. Perhaps a company announced a new product offering or there is board turnover flagged by A.I. If you’re not continually monitoring, you’ll miss an opportunity to companies that are.

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So how can A.I. change the M&A process? They key to an acquisition is accuracy and speed in identifying value and risk of target companies. A.I. finds the hidden value and predicts latent risk by continually monitoring and tracking data points, 24/7. It never sleeps. It never calls in sick. Best of all, it isn’t a hidden secret inside a vendor’s black box. It belongs to YOU.