A Deeper Dive into M&A Buyer Analytics
Buyer analytics answer common investment bank questions
• Which buyers should we focus on?
• What are the top concerns for our lead buyer?
• Where are the bottlenecks in buy-side m&a process?
Gauging Buyer Activity in M&A
Investment bankers rely on data room analytics to gauge buyer activity. This is a limited perspective that shows activity based on download and document views. Some bankers even restrict bulk downloading to capture incremental download activity. Restricting bulk downloads makes the experience agonizing for buyers and slows down their diligence process. While tracking downloads is a common metric of buyer activity, it is often inaccurate. Users interact with documents in different ways; viewing all files through an online viewer, offline and on print. This results in a limited view.
Investment banks that follow a project management methodology like Agile M&A, capture far greater data by leveraging a project management tool.
Using Project Management Tools to Capture Data
Firms that transition from email and excel trackers to a project management tool capture 3-5X more data points. When tracking the activity around the specific diligence questions being asked, a whole story unfolds. You can see which topics buyers are spending the most time on.
If a buyer group has an upcoming management meeting and insights show the buying group has spent 80% of their time on three specific legal issues, you can prep you client much better in advance. Using this data to understand buyer priorities keeps your deal team focused on the activities that move the deal forward. This also makes it easier to identify bottlenecks in the process that are difficult to pinpoint when sending excel trackers back and forth.
Companies like Silverline are evolving deal analytics.
They integrate insights into tools like Salesforce to help investment banks build a proprietary set of data accumulated from all their transactions. This creates competitive insights developed from the firm's experience. This model identifies patterns in bid process, aids in knowledge transfer and helps deal teams better prepare for transactions.
So, how does an old school investment bank catch up to 2019?
We firmly believe it all starts by adopting a project management methodology. Most teams default to a waterfall approach on spreadsheets that was started in the 80s by Bill Gates.
Adopting a Project Management Methodology
Simply adopting and following a project management methodology can greatly increase speed and quality of work. Usually we see a disconnect in deal teams between senior and junior. Managing Directors and Directors hunt for deals while Vice Presidents, Associates and Analysts are responsible for running the process.
These lower levels often have little to no formal training on any sort of project management methodology. The highest improvement impact an investment bank can make is to train on a project management methodology. This will lead to process improvement, better utilization of technology, and a stronger focus on value-add activities. These process improvements also create a better experience for buyers and sellers resulting in deal success.