Buy-side M&A Technology Trends in 2022
January 31, 2022 | Blog
By Anthony Scudieri, Product Marketing Manager
12 Stats for One Big Year
Do you ever cut across the grass instead of taking the path, because it’s easier? When enough people do it, you end up with a new path. Often the original design doesn’t suit people’s real-world needs.
So it is with M&A. For years, buyers have had to work with data rooms set up by sellers – often inexperienced ones. In response, many began to run their buy-side processes from their own data rooms. But they’re still using a platform originally designed for sellers – a muddy short-cut across a lawn.
So, in 2021 we set out to pave that path. The result is Datasite Acquire, the world’s first dedicated buy-side M&A platform. And in just 12 months it has given us 12 reasons why buy-side M&A technology is the natural route to acquisitions and much more.
1. Every day another buyer switches
Buyers have voted with their feet. In 2021 alone over 400 corporate development teams and private equity firms signed up to Datasite Acquire – more than one a day on average. Companies of every shape, size and sector are switching, from middle-market mining corporations to large-cap global private equity firms. Having their own platform matters. Here’s why…
2. Buyers claw back over three weeks
In M&A time isn’t just money – it’s more than that. Saving just a single day can mean seizing a new opportunity. According to an internal Datasite review of more than a hundred deals, buyers completed their review processes a staggering 22 days faster on average. That’s a game-changing acceleration. Or to look at it another way…
3. Deals take a third less time
It’s not just our own data. Clients report around 30% time savings per transaction using Datasite Acquire. The biggest efficiencies come from:
- Consolidating all checklists into the data room, so there’s one source of truth
- Expert support with setup, templates and training
- Real-time updates on workflow progress
To quote the clients themselves:
"Datasite Acquire saved both our portfolio company, and us, almost two weeks over the course of a seven-week process."
- Private Equity Vice President
"We saved 20% or more in time by creating an efficient, repeatable way to conduct buy-side reviews across the whole deal team."
- Director of Corporate Business Development
"Using Datasite Acquire translated into 30-40% time savings for us, our portfolio companies, and our sellers."
- Private Equity Associate
4. Multiple transactions are the norm
Clients of Datasite Acquire completed over a thousand projects in total, working out at 2.5 transactions per client. In other words, it’s already the norm for buyers to run more than one deal on this platform – and some run many more. With tuck-in buys and roll-ups increasingly central to private equity and corporate toolkits, being able to replicate a successful process effortlessly is winning legions of fans. It could get tricky, except…
5. Over 7,000 hours of expert buy-side support
Buyers need specialist support just as sellers do. From staging and templates to everyday tasks, our product experts gave clients an average of seven hours’ expert help per deal, to set them up for project management success. But it’s not just the time, it’s the results…
6. More than 10,000 solutions to keep deals moving
Our support time is quality time. We tackle problems head-on until they disappear. Intuitive product design is complemented with on-tap help to ensure a truly frictionless experience. There is no ask too big or too small – to the extent that hyperbole now seems just a natural client response:
"The customer support is unbelievably phenomenal. There is no comparison whatsoever."
- Chief Financial Officer
7. 18,000+ dealmakers and still breathing space
It’s a good thing our product specialists know what they’re doing. The sheer numbers of people involved in even a small review process can be overwhelming. In 2021 more than 18,000 dealmakers used Datasite Acquire – demonstrating the widespread hunger for rinse-and-repeat processes.
Those early pioneers have paved the way for you to join them. Their feedback has enabled us to fine-tune the platform based on real deals in every global region, sector and use case you can think of. In fact…
8. Are there even 10 transaction types?
Like we said at the start, it’s the clients who know best. We’re constantly monitoring how our platform gets used in real deals – and 2021 alone saw Datasite Acquire deployed in more than 10 different transaction types. After buy-side M&A, the most popular uses were for IPOs and audits – and with good reason.
IPOs involve extensive checklists, for which the trackers feature is the perfect answer. Audits require streamlined communication both internally and with your auditor, so features such as document commenting and direct links to underlying materials are worth their weight in gold.
And it’s still early days. As the potential applications of Datasite Acquire continue to grow, we’ll be there to support and optimize it for them.
9. More than 2,000 offline checklists replaced with trackers
Ending spreadsheet proliferation has to be one of the biggest highlights. Instead of external checklists with ever-changing versions, there’s one set of checklists embedded in the data room. And with the tracker dashboard, you know exactly what’s been done and what needs doing, in real-time.
In the past year over 2,000 trackers were created, eliminating both problems and excuses about version control and missing emails. Trackers account for a big chunk of those 22 days saved.
Perhaps more important than time savings: clients report the consolidated workflow eases relationship strain during the due diligence process. It turns out sellers really like not being bombarded with multiple, duplicative checklists from hordes of consultants.
Buyers’ extended review teams also don’t like being bombarded with checklists and emails, which brings us to....
10. Found: over 900 due diligence findings
Used to due diligence findings from your extended review team getting lost in the mail or lost in translation? We fixed it, by equipping Datasite Acquire with an embedded findings template. It compels extended deal teams to provide answers in a concise, standardized form, and thus brings issues to light before a deal progresses too far.
This feature set has a small(er) but passionate following. Here’s one example from over 900: during a roll-up, a mid-market healthcare services client identified that an insurance carrier was incompatible. So it dropped the deal before wasting more time and resources.
11. Fine-tuning the experience 37 times
In the first year of launch, we’ve enhanced Datasite Acquire with 37 separate feature releases, driven by feedback from clients. It’s a testament both to how much the platform is used, and to how much we respond to clients. Our product and engineering teams are constantly drawing on client insights to prioritize new features to develop – so our platform is truly built on the expertise of the top deal experts: you.
12. And 100% more brain cells to build the best buy-side platform
None of this would be possible without the right people to deliver it. Since Datasite Acquire launched, we’ve more than doubled our team of product specialists, engineers, UX designers and delivery managers. We now have twice as many experts dedicated to the continuous support and building out of great new features.
(Speaking of which, we’re still hiring. So if you know any technology wizards looking for an exciting new role, you know who to call.)
Datasite Acquire for you
That’s year one done and summarized on one page nicely, as shown below, here.
But the real excitement is still to come. How can Datasite Acquire accelerate your deal process, save you time, add value and even increase your success rate? We’d be delighted to find out with you.
Want to know more? Here's more about buyside M&A technology trends below.
Your Place or Mine? Why Buyers Are Choosing the Data Room
When you’re moving at lightning speed, shaking up your deal process is the last thing you want to do. That’s why when we first started to see buyers purchase the data room in 2018, we took note. Until then, data room selection in M&A processes was almost exclusively left in the sellers’ hands.
What first appeared to be a blip in our data steadily increased quarter-over-quarter as word of mouth spread. ‘We discovered that buyers preferred to standardize and to select the data room when they could,' says Colin Schopbach, VP Sales, who first noted this trend in 2018.
In fact, based on a 2020 global corporate survey of 600+ corporate dealmakers, 50% of all buyers said they choose the data room in one-on-one deals, either telling the seller which data room to purchase or purchasing it themselves. For larger, 1bn+ revenue companies that preference crept even higher, to 54%.
So what’s going on behind the numbers? Why are buyers upending long-standing practice? There are four major reasons.
1. Avoiding messy sell-side data rooms
One of buyers' biggest pet peeves is sifting through sellers’ data rooms trying to find and match items to their review checklist. Like a disorderly house, sorting through disorganized materials slows down deals and adds hours of painstaking work.
Expert buyers have discovered an easy workaround to this problem for one-on-one deals. Instead of plowing through a sell-side data room, they ask the seller to upload documents directly in the buy-side data room index. This simple workflow hack enables sellers to give buyers exactly what they want – and skip lots of aggravation on both sides.
"It's like a light bulb suddenly goes off. When they see how easy it is to save themselves all that time by simply reversing the traditional ownership of the data room."
- Colin Schopbach, VP Sales, Datasite
2. Access to data room analytics
Another big reason for the switch? Data room analytics. With buy-side review teams easily stretching to 50 or more people per acquisition, the need for workstream oversight is acute. In fact, in a recent corporate development survey we conducted, 79% of buyers said they struggled with the task, with 52% of them calling it very or extremely difficult.
Even before the advent of dedicated buy-side data rooms, buyers discovered that controlling the data room helped solve for this challenge. Metrics like progress by folder, user logins, or even permission checks provided a way to get a stronger handle on deal team progress.
With buy-side data rooms now in the market, acquirers have more visibility into their process than ever before. Dashboards with real-time metrics on workstream updates, for instance, automate what was before a painful, manual data collection and reporting out process.
In addition to speeding up workflow, buyer-specific analytics help surface potential issues earlier in the process.
"The Dashboard allowed multiple clients to act on an issue earlier in the process. In one example, they were able to save time and money on due diligence and walk away sooner. In another example, they worked through a major insurance issue that they said, using their old process, would have been too late to save the deal," says Kristen Cocco, Senior Director for Datasite Acquire, Datasite’s dedicated buy-side platform.
"We’ve spoken to several clients who’ve shared stories of how Datasite Acquire’s Findings and Dashboard helped them raise a red flag faster."
- Kristen Cocco, Senior Director for Datasite Acquire, Datasite
3. Platform standardization and quality assurance
Buyers also switch for a very pragmatic reason: platform standardization and quality assurance. Asking extended deal teams to work on a different technology platform for every review, and providing them with limited training and customer support, increases friction points.
In addition, buyers want to ensure the platform meets certain security and functionality standards. For instance, one common concern is whether reviewer permissions are adequate and set up correctly – a critically important and often challenging task.
4. Buy-side support
For buyers, first-class support matters. Buyside review teams can easily span 50 or more people across multiple internal departments – many of whom may have limited to no experience working in data rooms. For these individuals, getting up to speed can be downright overwhelming.
When a question inevitably arises, poor quality or timeliness of support can quickly derail the set timeline of a deal. Buyers want to choose a data room offering where service is as equally important as the underlying technology’s functionality.
But service encompasses more than just live help with a service team. Buyers care about choosing platforms that have robust self-training resources. These are another tool to help team members efficiently do their work within the data room, and more quickly cross the finish line.
Now that you know why buyers are choosing the data room, it’s your turn. Click below to speak to your client representative or request a personalized demo to learn more about how Datasite can help you take control of your buy side process as this trend becomes the norm.
Learn how Datasite Acquire can help you achieve your buy-side goals on your next deal.