Whether helping businesses grow through divestitures and carve outs, or optimizing diligence for corporate board members and C-Suite decision makers, AI and ML in M&A are here to stay.
We always read about new technology disrupting the status quo through innovation and AI, but how is this changing Mergers and Acquisitions? I was pleased to take a deep dive this month in Dallas — discussing what’s new since last year’s The Deal conference in Chicago — with my Grant Thornton colleagues Jim Peko, National Managing Principal of Transaction Services, and Jason Pizza, Managing Director of Strategic Solutions.
Watch the full panel moderated by The Deal’s Steve Gelsi here:
Technology is nothing new in the complex world of M&A. For years, conventional technologies like Excel spreadsheets were central to analysts’ M&A work. But now intelligent technologies like Artificial Intelligence (AI) and Machine Learning (ML) are sensing risk to increase the speed and accuracy with which they can harness the power of big data much earlier in the pre-deal process, monitoring millions of data points 24/7 and serving up the most relevant insights in a dashboard.
The automated dashboard is powered 24/7 to make human analysis easier each day. Sources of data generating a risk profile for your M&A targets compared to their peers include:
- Target & Competitor Growth Rates
- Pending regulations such as
- The Wyden Booker Bill to audit AI for bias
- ITI advocacy for AI governance
- The GrAITR Bill for AI R&D
- Customer sentiment
- Product reviews
- Media coverage
- Social mentions
- Employee sentiment
- Scraping public data from ratings sites like Glassdoor
- Industry news
- Queries on keywords like “restatement” or “breach”
View my interview with The Deal’s David Marcus:
Pre-deal, we identify gaps in businesses and align their needs with a target profile, monitoring prospective acquisition targets. Post-deal, we can more easily actualize these enhanced insights into a virtuous cycle, adding value to operations of the acquired target and across our entire asset portfolio.
Tech solutions which used to be affordable to only the largest of conglomerates are now driving competitive advantage for mid-market companies – both buyers and sellers alike. Our panel, moderated by The Deal’s senior reporter Steve Gelsi, discussed how predictive analytics are uncovering the optimal value of future transactions, and what corporate board directors and C-Suite decision makers need to understand to navigate these innovative new disruptions.
Jim Peko is our firm’s beacon of light guiding clients when it comes Transaction Services, and he did a terrific job explaining the evolution of due diligence – from research based on EBITDA, tax, and insurance – to a more holistic approach. Now, technology makes it easier than ever to connect the dots between historic data points, more quickly accurately predicting the future in M&A. The breakthrough has been the speed with which AI- and ML-enabled tools can harness and analyze more data than ever before, providing actionable insights fast. By bridging the gap between past and future, the potential value of transactions changes dramatically. And with the looming prospect of a contraction in our economy, the speed with which disruptions can be anticipated and mitigated is essential.
Our advisory practice has evolved as a result, from analyzing spreadsheets to helping our clients visualize data. What used to take weeks can now occur in days or even hours. In M&A – where time is of the essence – these new tools can quickly surface trends and nuances which humans alone might have overlooked. It’s easy to imagine Excel spreadsheets becoming obsolete, while our advisory role becomes more essential, strategically spotting trends and advising decision-makers, as shown in the data visualization example below.
While the art of what is possible today and in the near future is exciting, we never lose sight of how what’s new and what’s next fits within the entire life cycle of a deal. Boards and decision makers need to first know their company’s strategy to make the most of these intelligent new technologies and the capabilities they enable. As I shared last year, businesses can close gaps through M&A, with the desirability of targets mapped and measured in near real time. What’s new is how boards and executives can improve post-deal integration and operations, anticipating where pain points may be and devising strategies to work through them, actualizing the full benefit of their transactions.
Watch the follow up discussion with Jim, Jason, Eric Burgess, Partner, Transaction Accounting Services and myself:
To view more key takeaways from The Deal conference, I urge you to subscribe to my YouTube channel. If you or your colleagues want to learn more about how Grant Thornton can partner with you and leverage technology to strategically advise before, during or after an M&A deal, please contact me.
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