十月 01, 2020

Value Preservation & Transaction Tools for M&A in Critical Times

By Markus Schiller, Head of DACH & CEE

Many businesses are facing an uncertain future due to the effects of the current pandemic. We’ve all seen the news around increased bankruptcies, restructurings, and divestitures, especially in the retail, tourism, and hospitality industries. As a result, value preservation is being considered as a way forward. But what can firms do to ensure a future? What tools are available to help them?

Preserving value through restructuring
Earlier this year, when many countries were in lockdown and feeling the full effects of the crisis on their respective economies, we asked M&A professionals in EMEA for their thoughts on what would drive M&A market recovery. Most felt that restructuring or optimism/consumer confidence was the way forward. As one practitioner said, “I think everyone is realizing restructuring is not a bad word and it’s a way to have a faster comeback and have the ability to succeed.” Moreover, as this crisis is different than the last, in that it has nothing to do with the financial system itself, optimism is indeed justified.

While restructurings are expected to drive recovery, there are quite a few different options available. Divestitures appear to the be the path forward across EMEA. But what’s interesting is that before the pandemic really took grip, practitioners from across the globe felt debt-financing would dominate, as revealed in our survey of 2,235 M&A dealmakers, The New State of M&A. So clearly, COVID-19 has called for a rethink on restructuring.

Using digital tools for transactions
Another thing that has become apparent from the pandemic is that adaption is necessary to survival. And nowhere have we seen this more than on the technology front. For many of us, the pandemic has taught us to embrace technology; it has been the only way to connect with others, both for business and personal life. 

When we asked practitioners in EMEA what has been the most important aspect in getting deals done, the far and away winner was the ability to complete due diligence virtually or remotely. This is also in line with global dealmakers’ views. The New State of M&A found that global dealmakers believe due diligence is the aspect of the M&A process that can most be enriched by technology, with accessing a virtual data room with AI and machine learning technologies accelerating the process the most.

Such new technologies – which dealmakers believe will have the most transformative impact on due diligence – are making the entire M&A process, not just due diligence, faster and less labor-intensive. Moreover, these new capabilities are valuable in managing all corporate actions, including restructurings. And Datasite has already started to build the tools to help dealmakers succeed across the whole M&A process.

For instance, Datasite Prepare helps M&A professionals accelerate deal preparation by intelligently structuring and organizing data. The application, which is powered by artificial intelligence and built on the Datasite platform, automates the time-consuming burden of identifying, categorizing and indexing all deal documents and artefacts. Dealmakers can also take advantage of an embedded automated redaction tool to accelerate the process of identifying, blocking, and unblocking sensitive information to different parties as the deal progresses. Once the deal room is prepared and ready to go, users can quickly start due diligence and easily and securely reach out to buyers, if necessary, with automated tools that manage and track data and activity.  

This article was originally published in M&A Review, Vol. 2/2020. It has been reprinted with permission.

M&A in Pandemic Times

Hear what the experts had to say at this year's Munich M&A Conference (MuMAC 2020) about how dealmakers in Germany, Europe and elsewhere are coping with the challenges presented by the current crisis.

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The New State of M&A in EMEA

Our new report surveyed 860 practitioners across EMEA to find out their views on the current and future state of M&A in the region, and where EMEA is leading the pack or lagging behind when compared to other regions.

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