Overview of Deal Analytics Industry
Undoubtedly this sector is growing at a rapid pace. It is crucial to understand how much this sector is essential to institutional investors. Western economies predominantly use these technologies in carrying out M and A processes. This has already been present in the industry; many industry leaders are already using the full benefit of analytics in M and A transactions. However, some businesses still prefer using traditional methods to complete an M and A deal.
As per a report, technology-driven deal analytics is majorly used by different companies. It reduces the number of complexities in the deal-making process. Due to this, many businesses prefer using deal analytics technologies. There are different phases in an M and A process; deal analytics are used in all these phases. Research shows that analytics is used more in strategic formulations. In years to come, this technology shows signs of progression. DF
What is Analytics?
Analytics is a technology software that uses automation to generate solutions. Various types of analytics are used in a business. Over the years, the use of analytics has increased and improved how businesses work. When analytics are used, data is transmitted at a rapid pace to bring solutions to the information requested for.
Deal Analytics is a specialized field of data analytics that is predominantly used in Merger and Acquisition Transactions. Software such as analytics is used in different phases of an M and A transaction.
Types of Analytics
Analytics can be divided into the following:
Predictive analytics determines future transactions based on current information. These analytics use mining of data and machine learning. This software assits the business to predict future performance. For example, in an M and A transaction, predictive analytics are used to understand the target's performance. Based on the current variables available, the future earnings of the target can be determined.
Prescriptive analytics is a subset of business analytics that provides information on the company's corrective action based on the given situation. Prescriptive analytics comes under predictive analytics.
Enterprise Analytics is a mode of analytics that involves the infrastructure of an organization. In this form of analytics, the organization would use software analytics to run the organization. Example- A Target Company may have enterprise analytics across its framework to improve capabilities.
Descriptive analytics is mainly the understanding of data present with the business. This form of analytics usually deals with historical information present with the company. Comparison methods are used here for the changes in the business. Example- Descriptive Analytics can be used to understand the changes in the target company or the companies involved in the merger transaction.
Cognitive analytics is more to do with human understanding and processes applicable.
Retail analytics is more used in retail outlets to understand the supply chain mechanisms of the company. This is used to understand the number of sales, the amount of inventory in the company, and other information. This information is used to make crucial marketing decisions.
Predictive Science is a mechanism that uses deal analytics sequences. This is something related to predictive analytics.
Fraud Analytics uses predictive methods to understand business information. Once the machine learning software picks up valuable business inputs, the fraud analytics software would come to picture and use methods to counter frauds in the business.
Scope of Deal Analytics Services
Deal Analytics are carried out for the following reasons:
- To provide prospective information on the outcome of the merger.
- To improve the process of Mergers and Acquisition.
- The Acquiring Company (known as the buyer) can screen earnings ratios of the target company. Apart from this, the buyer can also predict if the potential acquisition is beneficial.
- Deal Analytics processes are also utilized to understand valuation processes carried out for a particular asset or security.
- These technologies are used to increase the confidence of potential investors and shareholders.
- Using analytics will help optimize the value of crucial ratios of the company.
- Companies using deal analytics in mergers and acquisitions would benefit from advanced data present in the world.
- Analytics used in merger and acquisition transactions, help in identifying complex data present in different countries.
- Deal Analytics helps in choosing the right amount of information for a particular transaction.
Deal Analytics Strategy
Digitization has disrupted the market. Finding the right information based on a particular subject is crucial in a Mergers and Acquisitions environment. To be on the top, companies have to develop and use strategies that utilize current technology. Companies also have to appreciate the role played by AI, Automation, and Machine learning in the M and A process.
Enterslice understands that there are complex changes in the world. To address these changes, we have developed real-time strategies to help organizations cope under all circumstances. Our main aim is to build value in the services we provide. We adapt according to the commercial landscape changes and stay ahead of the market.
Our analytics strategy depends on the following:
Development of Strategy
In this step, we understand what the needs of your business are. In an acquisition process, we first understand what the buyer wants from the transaction. Based on the above, we develop a strategy and focus on the priorities of the buyer.
After carrying out the above, we will deliver deal analytics services for the business. Our business and IT team will integrate and develop strategies based on predictive analytics, prescriptive analytics, and other automation processes to make it easier for your business needs.
Implementation of Strategy
After preparing a particular strategy, we implement it throughout the framework of the deal or transaction. By doing this, your business would gain the benefits of:
- Digital interaction- Based on the complexity of the transaction, the amount of digital interaction will depend on the deal.
- Data Models- Using Deal Analytics mechanisms will help your organization understand different models of data interpretation. Through this process, your organization can appreciate the benefits of analytics.
- Consumer Confidence- Using different methods of analytics will help improve shareholder and consumer confidence of your organization.
- Trust- Using our strategy for analytics is developed on the basis of trust.
Close of Deal
Using our strategies would effectively assist in closing the deal. Moreover, our strategy will provide you with advanced information on available data on the transaction process.
Organizations are not completely making the use of deal analytics. Using these advanced technologies would change the Merger and Acquisition landscape. The use of analytics in M & A is evolving. Deal analytics can be used in all stages of a deal process.
This stage is also known as the transaction initiation phase. In this phase, major negotiation’s would occur; process letters would be exchanged, the parties in the transaction would be preparing for due diligence processes. Still, an organization can utilize the benefits of analytics in making the transaction a success.
Analytics to improvise the pre-deal process would include the following:
- Predictive Analytics which help the company predict the market forces that affect the target company.
- Prescriptive analytics which helps the acquiring company with the possible ways to go ahead with the transaction.
- Analytics will help the acquiring company obtain market information and future forecasts of the transaction.
- Deal analytics will also improve sourcing information from third party websites and social media.
- Target analytics is used for testing information present with the target company.
- Business trends can be followed and monitored. Based on this, the performance of the transaction can be understood.
- Apart from this, analytics will also help the buyer understand the transaction by creating a hypothetical scenario.
During the Deal
In this phase, the parties will be involved in carrying out due diligence exercises and understanding the transaction's crux. The use of analytics is beneficial in this stage of the business.
Analytics used during the deal process will include:
- Analysis of historical information of the company.
- Target sales of the company. Information on the previous acquisitions carried out by the company.
- Real-time response analysis to update the changes in the deal process.
- Use of Hypothesis testing, which will analyze strategies used by the seller and the target.
Post deal process is the phase of monitoring when the transaction is closed or almost closed. Deal analytics can also be utilized in this phase of the acquisition process.
The following can be carried out using analytics in the Post-deal Process:
- Post analysis of the transaction.
- Comparing the approaches adopted as a result of deal analytics and its outcome on the transaction.
- Qualitative Analysis approach based on the amount of sales post transaction and the revenues earned.
Advantages of using Analytics
Some of the advantages of using deal analytics in a merger and acquisition process are:
- Technology Advantage.
- Optimization of Data.
- Improves the value.
- Provides confidence in the services provided.
- Enterslice is a recognized management consultant in providing analytics services.
- Experts at Enterslice have conducted Mergers and Acquisitions Services with the primary objective of adding value to your organization.
- We have multifaceted teams of professionals comprising Chartered Accountants, IT professionals, lawyers, and company secretaries.
- Professionals at Enterslice are experienced in interpreting complex data and converting it into reliable business information.
- We have extensive experience in handling matters related to mergers and consulting matters in India.