Digital transformation, such as optimisation of business processes and business model transformations, is one of the key value drivers for businesses and successful M&A transactions. Digitalisation and technological developments are disrupting businesses and M&A activities across industries at varying paces. There is no question that investors who look beyond traditional commercial and financial due diligence methods to technology are likely to make the best capital allocation decisions. 

Pervasiveness of technology

The nature of technology supporting the realisation of a company’s core goals has changed significantly over time. Technology can be a key differentiator, if not the key differentiator, in the way companies manufacture, market, sell and support products and services. The use of technology has become pervasive though many companies across all sectors.

Why is technology important in M&A?

The predominant underlying theme of any M&A transaction is to realise the deal rationale and to elevate the company to greater value. It has become a necessity to include technology aspects across the lifetime of a deal to ensure that opportunities and risks are identified early on and that value is protected and created as an integral part of due diligence, separations and integrations when executing acquisitions and divestments. Technology is a key driver for M&A, as we have seen in many integrations and separations that technology drives the majority of transformation costs, as well as transformation timelines and complexities.

How we can help you?

We work across the deal cycle to support you in identifying technology-related value creation opportunities and risks, and providing deep functional technology and digital transformation expertise as part of integrations and divestments:

  • Technology Due Diligence (buy-side due diligence)
  • Technology Vendor Due Diligence (vendor assistance and vendor due diligence)
  • Technology integration & separation
  • Technology synergies and value creation

Our dedicated Deal Execution Technology in M&A team combines a wealth of experience – having supported well over 1,000 transactions across a wide range of sectors – with deep expertise from our global Digital Transformation practice.

Given the breadth and depth of deals that we have successfully supported our clients on, we understand that all transactions are different. However, some of the issues, complexities and processes are similar and we have invested heavily in proprietary tools and frameworks to be more efficient and add value no matter what the timeframe or access and sensitivity constraints are. We are constantly evolving our propositions and tools, which include:

Powered Enterprise is your direct route to advanced organizational design, leading technology and operating models. It creates a fully re-designed business function, based on leading practice, and confers the power for continuous transformation into the future.

You can tap straight into advanced leading processes, organizational design, technologies, operating models, implementation methods and tools. Choose a rapid ROI and confidently enter your new digital reality by deploying any of our nine pre-configured functional models.

Cyber-crime is a major threat and more acutely so during M&A. A cyber security breach can significantly impact the value of your acquisition or divestment. Our KPMG CyberScan:

  • Scans the dark web and other publicly available data sources for the company’s digital assets being sold or misused;
  • Identifies real-time open weaknesses in the company’s networks and portals;
  • Mimics what a hacker would do to find a weakness and entry point into the business;
  • Provides a comprehensive outside-in cyber assessment with which we tailor any interaction with the target business.

Data is the life blood of any business and the impact of getting this wrong can be devastating. Our experts and tools help to:

  • Understand and identify the relevant data;
  • Protect your data;
  • Ensure access to your data is limited to the appropriate people;
  • Ensure that your business strategy and data monetisation plans are not impacted by the transaction.

The enterprise resource planning (ERP) system is typically the most complex and needs the longest time to integrate or separate. We have developed specialist tooling to:

  • Quickly identify the impacted legal entities, customers, suppliers, products etc.;
  • Reduce the complexity during a separation by only extracting the relevant and necessary data including reports, interfaces etc.;
  •  Quickly move to a separate, more fit-for-purpose ERP if there is a better fit for the business.

Integrations and divestments often involve multiple countries, legal entities, brands, products etc. Our digital suite of products:

  • Enables the creation and replication of actions across geographies, brands, etc.;
  • Helps to track and deliver across the multiple dimensions;
  • Provide real-time status of outstanding areas and bottlenecks;
  • Provides an audit trail of decisions and actions;
  • Manages the process to a successful outcome.

A range of solutions that enable our clients to maximise the benefits of the cloud during the deal lifecycle. These include:

  • Identifying the upside opportunities of increased cloud adoption;
  • Rapid cloud set-up and phased rollout of the application estate;
  • Supporting our zeroTSA approach (which aims to minimise technology TSAs) in a separation.

TSAs can present the divesting group with an additional burden. They bind the group into providing IT/technology services to another business, impair the divesting organisation’s ability to transform and deliver projects, and present an ongoing cyber security risk. Our zeroTSA approach reduces the TSAs that the divesting business gives to the separated entity by:

  • Rapidly separating as much of the technology before closing as possible;
  • Passing off any service provider obligations to third parties;
  • Building a standalone and independent environment that is significantly more appealing to potential buyers;
  • Reducing the running cost by removing unnecessary complexity, thereby increasing the deal value.