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4 Ways an M&A Platform Can Enable Efficient, Collaborative Due Diligence

Introduction:

Playbooks, virtual data rooms, and project management platforms all address the never ending quest to ease the overwhelming and disjointed nature of due diligence. Undoubtedly, advancements in technology have allowed for the largest improvements. More specifically, platforms designed for M&A deal management eliminate siloed teams and disjointed communications that have long plagued deal flow. Moreover, leveraging one tool for centralized deal management helps guarantee high-quality analysis and clear decision-making across teams. This ultimately results in a more insightful due diligence process and has the potential to cut due diligence time and costs up to 50%. 

Below we discuss four ways an M&A platform helps enable efficient and collaborative due diligence. 

How an M&A Platform Can Enable Faster and More Cost Effective Due Diligence:

  1. Process Management & Communicating Growth Objectives
    A complete M&A platform provides a place to manage each deal from start to finish, as well as a clear and concise opportunity for presentation of established deal objectives and overarching deal strategy.  With this clear understanding of established growth objectives, deal teams can easily and constantly track and monitor progress against them and identify operational KPIs. Strategic dashboards in the leading M&A platforms allow teams to gain insights into how deals align with overall strategy and goals.

  2. Managing Relationships and Communication with Targets and Stakeholders
    CRM functionality is essential for keeping deal teams focused on overarching strategy and only moving forward targets that fit this strategy. M&A platforms provide CRM tools that allow users to log all related calls, meetings, and emails in one secure location. Additional notes regarding these forms of communication can also be captured. As a result, critical transparency allows stakeholders and team leaders to regularly view team activities such as calls and NDAs. This enhanced organization and CRM management equate to stronger, more strategy-aligned targets moving through the deal pipeline, making the work during due diligence more meaningful and effective in achieving deal objectives. Some M&A platforms make this even easier through an integration with Microsoft Outlook.

  3. Clearly Defining Tasks and  Establishing Deadlines and a Tracking Process
    Ensuring nothing is overlooked is key to successful due diligence. Information requests and tasks can quickly become unruly and disorganized during the process. One of the prime benefits of an M&A platform is the ability to rein in documents and organize tasks. Namely:
    1. Information requests — all the material to be provided by the seller in one place.
    2. Task management — assign responsibilities and due dates, setting clear guidelines for team members and holding them accountable. This also helps keep due diligence tasks moving forward.
    3. Review progress tracking — a bird’s eye view allows for a more holistic understanding of the process as stakeholders can see what is done, what is in progress, and what has yet to be started. M&A platforms allow this information to be viewed by topic or by team members. 
    4. Email notifications — informative updates are provided when new material is added, tasks are assigned, and/or work is completed. The ability to check the pulse of the work regularly and from any location is critical.

  4. Staying Connected to Your Ongoing Projects, Team, and Prospects — Even Out of Office
    Conducting robust due diligence also means being on the go. From site visits, to meetings, to relationship building opportunities, valuable M&A work does not just take place in the office. Here lies another powerful benefit of M&A platforms: they provide the ability to stay connected, securely, even when out of the office.

Conclusion: 

Historically, discussions revolving around due diligence in mergers and acquisitions have conjured up images of stressed, overworked team members trying to balance their traditional roles with all of the additional work that M&A brings. These images might also include “war rooms” stacked high with various files and documents. Fortunately, improving  the infamous due diligence process remains a priority for M&A practitioners — and rightfully so, as this critical deal stage lays the groundwork for extracting deal value. 

A successful due diligence process should empower acquirers to determine if a target meets its strategic goals or if it is best to walk away from the deal. It should identify potential red flags and risks and determine a fair price for the target. Without alignment and organization across teams and stakeholders, critical due diligence information may be lost or compromised, threatening the success of the entire transaction. A more efficient and collaborative due diligence workflow results in more effective data collection and insights, informed decision making, and detailed integration planning.

Leveraging one tool for centralized communications helps guarantee high-quality analysis and clear decision making across teams, which ultimately results in maximum deal value.

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