Deloitte has launched a new service offering aimed at dealing with growing volumes of data offered for due diligence investigations to acquirers. Getting data management right is, according to the Big Four giant, becoming an increasingly important differentiator for the execution of deals. The new offering leverages analytics tools as well as visualisation techniques.
M&A activity continues to drive growth for companies as organic growth is, in a relatively low global growth environment, scarce. Last year was a bumper year for M&A, hitting 4.8 trillion in transaction value, according to analysis by McKinsey & Company, and although activity is slightly down in 2016, the deal fundamentals remain strong.
One of the key parts of the M&A process is the due diligence phase. According to a new research from Deloitte, which involved a survey of 500 corporate executives, analytics based due diligence techniques are gaining traction in the wider space of identifying and checking promising targets – with around 80% saying that they see data analytics becoming increasingly important in the future of M&A.
In a bid to support clients with reaping the benefits from newly available analytics and data visualisation technologies within the M&A space, the Big Four firm has launched a new analytics offering – iDeal. The firm claims that their new practice proposition will provide clients dealing with increased data load, purported to have doubled in the past two years, with analytics technology solutions, down the line delivering faster answers to due diligence related hypothesis’ about targets.
Matt Henderson, a partner in Deloitte’s UK M&A services practice, comments, “We can look at much more data going back – which is something that our clients are interested in doing, particularly for cyclical or regulated businesses. And we can look forward further as well. We can perform simulation analysis and scenario modelling. Why are its margins better or worse? Can that be sustained or improved? This all brings more confidence to deals getting done. iDeal allows us to uncover issues that traditional financial diligence techniques may struggle to address effectively.”
Iain Macmillan, global head of Deloitte M&A services adds, “A few years back our diligence reporting would often be relatively standard in scope, culminating with a big presentation. Our interface with the client might not have been that regular, but through iDeal our work is more of an interactive experience.”
Another recent study by a consulting firm, West Monroe, found that the need for broad due diligence is becoming increasingly important as new threats emerge, such as cyber security risks, requiring more cyber security due diligence expertise, sourced either in-house or externally.