iDeal – Defining M&A Analytics

By Charles Knight, Iain Macmillan – Deloitte

An M&A analytics solution that provides deeper, more meaningful insights from data to deliver real-time answers and analyses throughout the M&A lifecycle.

The Mergers & Acquisitions (M&A) lifecycle is awash in data. It starts long before the diligence phase and picks up steam when companies share, solicit, and parse information for go or no-go decisions. But the entire M&A lifecycle — negotiations through post-deal, in addition to diligence — is marked by the need to make smarter decisions at what is often an incredibly high rate of speed with a high level of confidence in order to avoid doing a deal you might regret.

That’s where Deloitte’s M&A analytics capabilities can help you make more informed decisions more quickly. We have developed iDeal, an M&A-centric approach to analytics that focuses on developing insights at every step of the M&A lifecycle—and when they might have their highest value. This is not a handful of disconnected point solutions. iDeal is an integrated solution which has been developed for extracting insights from a target’s M&A data and using that to inform decisions both large and small.

Drill down

Historically, M&A decisions have often been based on high-level trends—strong sales quarters or impressive margins, for example. But what’s the real story behind the numbers? What’s really going on? Sometimes leaders find out only when it’s too late, when the strong quarter turns out to have been an anomaly based on a one-time event or when seemingly high margins might be cloaking hidden weaknesses in company operations. Time is often the culprit. With more time, the thinking goes, we could have secured the information we needed, discovered these issues, and used them to our advantage in the deal. In reality, you need the ability to go deeper into the data to find subtle nuances and hidden nuggets of information that might change the course of the deal—in time for those potential nuggets to affect deal negotiations. iDeal was designed to deliver these capabilities.

How we can help

Deloitte member firms are recognized around the world as a leading consultant in M&A, with experience in the M&A lifecycle, from strategy and execution to integration and divestiture.

Similarly, Deloitte member firm analytics professionals have emerged as having the ability to be an important force in analytics today, serving global clients across industry with a range of advanced services and capabilities. So it’s natural that combining these strengths through iDeal can be seen as leading to a more complete approach to deal-related analytics.

iDeal is a combination of tools, processes, and techniques integrated to provide big-picture insights with a microscopic level of detail. We can help clients put iDeal’s capabilities to work through:

• Strategy
• Implementation
• Analysis and decision support
• Integration
• Synergy capture

Bottom-line benefits

iDeal was designed to generate game-changing benefits for companies when time is short and critical. Here are a few of those most frequently cited benefits by clients:

Get there faster. In M&A, insights are more useful when they are generated in time to influence decision making. With intuitive interfaces and near real-time insight delivery, iDeal has been found to make it easier to generate and leverage insights.

Enhance the value of data. Today, many M&A analytics insights are used for highly focused moments or decisions. But the value of the data used in these scenarios, combined with data from elsewhere, can have an equally important impact in other phases of the lifecycle, such as integration and post-integration.

Go deeper. Too often, surface-level data doesn’t convey a broad or deep story. With the ability to analyze micro-level details and correlate them to macro- level decisions, M&A leaders using iDeal should be better equipped to uncover the real story behind the numbers.

Accelerate the sales and purchase agreement (SPA) process. Often, the process of nailing down an SPA typically engages a wide range of time-strapped participants in a race to complete the agreement. It’s a process that can be inefficient and time-consuming—when time is in short supply. iDeal makes it easier to analyze more data and deploy the results in a more efficient and effective manner. Not only is it faster, it’s smarter.

Smarter questions, smarter answers

In many respects, M&A analytics is all about asking—and answering—smarter questions throughout the M&A lifecycle. Using iDeal, here are some of the types of questions you might be answering today:

Diligence

• What has been the source of this company’s growth? Specific customer segments? Products? Markets? Something else?
• How well does this company retain its customer base?
• Where are margin trends negatively impacted by specific products, locations, or customers?

Negotiations

• What is the expected net impact of decisions reflected in our purchase agreement?
• Which risks might we encounter in doing this deal? (Operational risks, critical employees, SKUs, product lines, geographies, etc.)
• Which employees and customers should be covered by non-compete agreements?

Post-closing

• Which customer or supplier might we consider renegotiations with to quickly achieve cost savings or revenue improvements in the near-term?
• How are customers responding to the change in ownership? How has our risk profile changed as a result?
• What are the expected results of changes made to the business after the closing of the deal?