How dealmakers can work faster in 2021 to match market pace

According to the AFR, volatility in equity markets ‘means speed has become more important than ever for bidders and their advisors when stalking listed targets’ (AFR).
 
"I think you have to be prepared to move very quickly, because our equities markets are moving very quickly," said Sandy Mak, head of corporate at Corrs Chambers Westgarth. "If you want to do a deal you've got to get in there and you've got to be very quick with your diligence."
 
However, nearly all respondents (94%) in our research with Mergermarket agree that M&A processes will take longer to complete than before the coronavirus outbreak, with 48% saying they will take substantially longer. Rather than deal sourcing or target integration, it is due diligence that is expected to be the most difficult part of the M&A process in 2021, as cited by 38% of respondents.
 

Efficiency will come from advanced deal prep and due diligence tools

In our recent survey, 46% of respondents believed the advancement of deal prep and due diligence technology would be the number one biggest contributor to more efficient remote dealmaking in 2021.
 
The COVID-19 pandemic has clearly made dealmaking more challenging, not least because negotiations have to be conducted remotely as people continue to avoid all but absolutely necessary travel. Even so, tools such as sophisticated virtual data rooms and the application of advanced data analytics have minimised disruption to M&A, allowing in-depth due diligence and negotiations to be undertaken remotely and at speed.
 

Information governance the key to speed of action

In addition to engaging in diligence as early as possible so as not to put too much pressure on a target company, especially amid the pandemic, it is important that businesses have strong information governance embedded in the first place. In most cases companies are not in control of their data and this can cause complications and delays, and frustrate strategic decision-making.
 
“All CEOs and CFOs’ lives would be easier if they had all of the critical information about their company immediately available. Especially in these times of uncertainty,” said Alex Spronk, Head of Europe at Ansarada. “Decisions are being made on the spot by governments to completely close off certain sectors to consumers, therefore data needs to be readily accessible so that companies can act fast. This applies equally in day-to-day operations and deal events.”