As M&A accelerates, deal-makers are leveraging AI and ML to keep pace


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Rusty Wiley


Rusty Wiley is CEO of Datasite, a leading SaaS-based technology provider for global M&A professionals.

The global pandemic has changed the way we work, including how and where we work. For those involved in the mergers and acquisitions (M&A) industry, a notoriously relationship-driven business, this has meant in-person boardroom handshakes have been replaced by video conference calls, remote collaboration and potentially less travel in the future.

The pandemic has also accelerated digital transformation, and deal-makers have embraced digital tools, sometimes even drones, to help them execute effectively. Even legal M&A professionals, often among the major holdouts to embrace remote work and technologies, are increasingly using technology to automate common time-consuming tasks, such as redaction and contract analysis. And with a vast majority of them reporting permanent remote or hybrid work arrangements, further technology adoption is expected.

The quickening pace of digital transformation is no longer about ensuring a competitive edge. Today, it’s also about business resilience. But what’s on the horizon, and how else will technology evolve to meet the needs of companies and deal-makers?

There are still many inefficiencies in managing M&A, but technologies such as artificial intelligence, especially machine learning, are helping to make the process faster and easier.

AI helping sell-side prepare deals and conduct diligence

Typical deals require the analysis of huge amounts of data in a relatively short period of time. So, when time is money, tools that speed up the M&A process are critical. That’s why AI-powered tools that help deal-makers automate tasks, reduce human error and ensure greater regulatory compliance are gaining interest.

For example, when it comes to selling a business or asset, one of the most challenging parts of the M&A process is organizing and preparing the files needed for review by potential investors or purchasers. Investment banking analysts often spend weeks reviewing thousands of files to figure out how to organize them and prepare them for a transaction.

Using statistical methods that allow a system to learn from data, and then make decisions, AI and machine learning leverage an algorithm to sift through those large volumes of data and content. Such a tool can then enable the upload of hundreds or thousands of files and their review by an AI engine, which reads the files and suggests categories, as well as appropriate folder locations, for the files. AI and machine learning streamline the process in a matter of minutes, not weeks, freeing up deal-makers to focus on higher-value activities.

Once the files have been sorted and categorized, the seller can share information easily with potential buyers in a virtual data room, a cloud-based digital storage area where a deal’s documents and artifacts are kept while due diligence is being conducted.


The M&A due diligence process is one of, if not the most, labor-intensive processes. That’s why deal-makers are excited to apply AI to help enhance the accuracy and speed of the review process. In fact, research shows that AI will transform the M&A process by decreasing the time it takes to perform due diligence to less than a month in 2025 from three to six months in 2020.

One area of the due diligence process that is already benefiting from AI is redacting or striking words, phrases and images in documents. If nonrelevant personal information, phrases and images can be easily hidden from within the data room, it can improve document accuracy and security, improving deal efficiency and regulatory compliance. If common words and phrases carrying personal, private information can be bulk-redacted using AI, as they can today, even better.

AI is also being used to help support easier cooperation among deal-makers across borders and languages. While a majority of M&A documents are in English, emerging AI-powered tools may soon support more than one language.

AI serves the accelerating speed of the buy-side

Technological adoption lags on the buy-side of M&A — surprisingly, almost two-thirds of buy-side deal-makers still use a manual process, such as a word processing document, spreadsheet or hard-copy checklist, to track deal progress, according to a recent survey of legal M&A advisers. If keeping a deal on schedule is key to how buy-side teams successfully close the deal, consider, then, how big an impact AI could make in speeding up that process and removing analog systems of diligence.

AI and increased digitization are enabling deal-makers to better manage information and speed up the increasingly complex operation of preparing for a deal and conducting due diligence. Early in the deal process, AI can be used to identify potential M&A targets and track information about them or information that affects their business models. Analysts spend hundreds of research hours on deal targets that constantly shift — time that could be better spent doing higher-level thinking.

How to make sure your legal team is M&A ready

AI can also help acquirers or buyers develop increasingly sophisticated models of due diligence, where the work of advisers is accompanied by various types of AI-assisted search queries as well as market and sector data extraction. In this instance, AI can extract economic or sector data in real time to allow buyers more detailed and nuanced views of the business realities within a country or sector.

In any market, cutting through the minutiae of due diligence and accelerating closing timelines is incredibly important to buy-side participants. In a sellers’ market, buyers must promise tight timelines to win bids. Furthermore, allowing ML and AI to quickly analyze labor-intensive processes lets buyers focus on the key deal issues and can help them identify red flags.

Whether buy-side or sell-side, time is money

Financial services firms looking to get an edge in M&A are strategizing how to ride the surge in deal-making happening now – the pace of M&A deals has rebounded and beat historical averages, so the time is ripe to leverage AI.

No matter what side of the equation a deal team sits on — buy- or sell-side alike — cutting out the labor-intensive parts of M&A both speeds the process and reduces the time-consuming tasks that lead to burnout in the industry. Sellers reap the value of their hard work faster, while buyers can move past the manual time-consuming stages of the diligence process and focus on the most important aspects of the deal — and ultimately deploy their capital at speed.

While AI and smart technologies are helping save participants both time and money, they won’t replace human intelligence, especially when it comes to negotiation and other soft skills. Instead, AI serves to augment and amplify human expertise.

The global pandemic has forever affected the way we do business and how deals get done. While AI won’t solve all M&A process pain points, it’s clear that technological innovation can help move the dial. Moving forward, adopting the right technology to efficiently and effectively manage the entire M&A process will be critical for companies to not only survive but thrive in a post-pandemic world.

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