Among the main anti-crisis measures for the exit of enterprises from a difficult economic situation are the commission of mergers and acquisitions. This anti-crisis regulation tool contributes to the prolongation life cycle of companies and enterprises, increases their competitiveness in the external environment. In this article, we will discuss the development of additional sources in M&A deals.
What is M&A Transaction?
The interest to M&A deals is quite high. One of the reasons for the increased interest is that the degree of activity in the merger market indicates the state of the economy. According to world experience, during the growth of the economy, there is a significant increase in both the volume and the number of transactions concluded. Accordingly, during periods of recession or crisis, the M&A market tends to decline.
The terms merger and acquisition are used synonymously in everyday life. After all, M&A is a general name for a process that unites the transfer of corporate control over a business in all forms, including the purchase and exchange of assets.
Mergers and acquisitions expand the horizons of modern companies. There are two main types of investment opportunities: domestic and external. Internal investment can be obtained through reorganization or investments in the company itself, external investments are associated with the acquisition of new assets or with their inclusion in new projects. Companies should consider another circle of possibilities involving interaction with other market players and constantly look for such opportunities ourselves, comparing the potential for internal growth and mergers.
Impact of digital transformation on M&A processes
The efficiency of M&A is significantly influenced by the development of modern business processes, primarily digital transformation. In modern conditions, in the M&A processes, there is a shift in emphasis on digital transformation as a driving force and one of the main factors of the development of the market of mergers and acquisitions in modern conditions. As a result, the motives of M&A deals related to with access to information, advanced technologies, and specialists in this field.
Examples of digitalization of M&A processes are:
- digital target screening. This tool includes data from external sources to analyze industry trends, compare growth paths and financial profiles of various potential targets;
- data room m&a simplifies the exchange of documents and makes it more efficient.
- an interdependency accelerator. By using data visualization to highlight critical milestones, this tool provides the ability to aggregate and process hundreds of workers plans to gain insight into key risks, issues and cross-functional dependencies for both acquisitions and sales;
- digital organization design. Using internal data and industry benchmarks focused on best practices, executives can create customizable organizational sizing and value models to facilitate workforce alignment;
- digital purchase accounting. Following an M&A transaction, streamlining procurement accounting can be difficult, but the digital tool procurement accounting can automate a number of aspects of the process by combining and displaying relevant data;
- processing of financial reports on the sale of assets (divestiture financials processing) automates and accelerates the creation of adjusted financial results.
Experienced buyers of technology assets tend to fine-tune all aspects of its corporate M&A mechanism to provide the flexibility required in technology transactions. There is no one right way to organize the seal, but there are proven best practices that can be combined strategically.