Top M&A Tools: A Complete Guide

Originally the domain of large corporations and close-knit circles of big-shot bankers, lawyers, and brokers, M&As have gone mainstream. Here’s how to uncover, track and take action on these lucrative opportunities.

The importance of market insights for brand strategy

M&As are now part of the corporate strategy for many companies ranging from small to midsize, and of course, large organizations. Their motivations for exploring M&A opportunities have shifted from a heavy focus on hard assets to things like patents, technologies, market share, geography, and customer/employee relationships.

With the current advancements in technology, information on every bit of a company’s balance sheet and culture are more readily available now compared to, say, the turn of the 20th century when the big bang of the M&A market happened. Moreover, there are a plethora of tools available to help M&A teams at every stage of the process.

Exploring M&A Tools

Despite the many conveniences that are available to today’s M&A professionals, it is not easy to choose the right M&A tools. The great success in technology has also made sure that a myriad of providers has entered the market. And while many of them offer great solutions, the portion of the market that is not up to the task makes it necessary for the modern professional to scrutinize every option presented to them.

Before choosing a tool, the most important question to answer is the one asking what you need to accomplish in your M&A journey. As you will see below, there are M&A tools for every step. This is why we must caution you not to go looking for a tool that will cover all your needs. Rather, segment your process into different stages or aspects and find the most suitable tool for each one.

Top M&A Tools

An M&A toolkit will improve your company’s M&A capability and also improve the individual skillsets of the people involved in the process. To ensure a successful process, your toolkit should include each of the following M&A tools.

1. Virtual data room (VDR)

Before closing the deal, the buyer needs to have as much information as possible about the potential purchase. To facilitate this, the seller sets aside a place where all important documents can be accessed by potential buyers. This is the essence of the data room.

By definition, a data room is a secure location for storing privileged data for M&A transactions. A data room can be virtual or physical. Because the cost of maintaining a physical data room is usually very high, the majority of sellers now prefer virtual data rooms (VDRs) allowing buyers/bidders to access the shared information remotely. Apart from saving the seller money, this arrangement has proven to be more convenient for both parties and saves them a considerable amount of time.

A VDR is a cloud-based solution to facilitate the process without compromising on its requirements. To maintain the stringency of the physical data room, the VDR demands that buyers access it through a secure internet connection. Confidential information is conveniently shared between buyers, sellers, and any third parties without losing control of who has access to any particular piece of information.

Other important features of a VDR include note-taking, Q&A, multi-factor authentication, and advanced permissions.

Having been around for nearly two decades, the VDR concept has not only attracted sellers and buyers but also service providers in large numbers. As such there are hundreds of different VDR providers. Some of the most popular are Intralinks, Devensoft, and DealRoom.

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2. Status tracker

Like many business processes, the M&A is time sensitive. Moreover, juggling different projects requires you to remain on top of the progress of each and certainly, mixing them up can be a costly mistake. M&A professionals track the status of their deals in order to remain on the time track and avoid mixing up their deals.

A common tool used for this purpose is MS Excel. That’s right, good old Excel is an excellent status tracker for M&A professionals. The sheet will usually have standard columns such as the title of the deal, a succinct description, category based on the owner’s classes, priority of the deal, its completion status, custom labels, start date of the process, and end/due date. The tracker is updated accordingly as things change and then shared with the relevant people.

For professionals managing many different deals at a time and constantly looking for new opportunities, a pipeline management software is preferable. Also referred to as a corporate development software, the pipeline management software helps corporate development teams organize all of their deals, whether they are ongoing or not yet started. The tool categorizes deals by the stage they are in, making it easier for the professional to compare and track different deals.

Devensoft, DealRoom, and Eknow are some of the most popular providers of pipeline management software.

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3. Project management program

Mergers and acquisitions are both complex processes that require detailed planning, high-level organization, and efficient communication between parties. What’s more, it often takes a considerable duration of time before the deal is finalized. This is why M&A teams must have project management programs.

Project management programs are poplar in the M&A space, and for good reason. With it, M&A teams can create efficient workflows that can be replicated and repeated in other contexts. It is also a way of ensuring consistency in the organization’s activities such as having a new workforce (e.g. internship programs) entering the system at the same time every year. And these tools typically offer a post-merger utility as well.

A good project management tool should allow efficient planning and allocation of responsibilities. It should also allow collaboration, which is indispensable for large teams where members assess each other’s work. Further, it should have top-notch reporting tools and a neat dashboard with real-time update capabilities.

Some of the best project management programs are GanttPro, Celoxis, and Teamwork.

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4. Data analytics

Successful M&As are heavily reliant on the collection, evaluation, and analysis of data. In the modern fast-paced, data-rich business environment, this is becoming increasingly important. When valuing targets, M&A professionals need to make comparisons within the industry or adjacent industries. This requires finding the right data, in sufficient amounts, and in real time.

Data is also important when finding prospective buyers. Using the right tools, sellers can gauge prospects based on their markets and even discover important information on their M&A strategies. Purpose-built software can be used to analyze historical data and reveal historical trends which may shed a light on cash flow projections. Lastly, counterparties apply insights gained from data to frame their responses and negotiate effectively.

Entering a modern M&A procedure without data is like driving with your eyes closed. On the contrary, investing in a robust data analytics tool is sure to pay off. With NetBase Quid, you have an unobstructed view of your target whether you’re looking to sell or buy. A comprehensive dataset shows you the latest movements in the market including new technologies, patent applications, and potential M&As. You can analyze your competition’s investments and acquisitions, customer sentiments, and even anticipate their next move. You will never be blindsided when closing an M&A deal.

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5. Due diligence tool

Professionals have adopted tools to better manage the due diligence process. When used properly, the tool can speed up the process significantly without losing out on accuracy.

You can even eliminate the status tracker (Excel) if you have a due diligence tool! Where the Excel tracker forces you to go back and forth updating and sharing new updates manually, the diligence tool shines in simplicity. It includes features of the VDR and more: the ability to manage and complete diligence requests on a single platform.

A good due diligence tool will allow parties to store and share documents without having to leave the platform. It also lets them attach files to specific requests, assign roles to other members, set due dates, and more.

Check out CENTRL, DealRoom, and Adlib for a due diligence tool.

6. Collaboration tool

Although not created specifically for the process, collaboration tools are in everyday use among M&A professionals. These are primarily communication tools, but the choice of tool varies in different contexts. Luckily, you can have as many as you need in your phone or computer without worrying about confusion or redundancy.

For instance, any professional has email. But they may also have Skype or Zoom for video communication. Not to stop there, Slack, Trello, and Airtable allow IM-like communications and let users send a variety of file types. You don’t need all three, Slack alone may be sufficient.

When choosing communication tools, pay attention to those that integrate with the other M&A tools that you’re already using.

If you want a market intelligence tool that integrates with your entire toolkit ensuring a smooth M&A process, NetBase Quid is your friend. Our platform is not only great for discovering critical information you need to successfully complete your merger or acquisition, it also integrates all your data sources to give you a single view of your repository – and a single source of truth. Also, the dashboard is clean and powerful to make sure that you are always looking at the most current information. Reach out for a demo to see everything in action and streamline your M&A processes.

The importance of market insights for brand strategy

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