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Buyer's Guide: M&A Process Management Software

Unravel the capabilities of M&A process management software and some examples

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March 14, 2023

The merger and acquisition process can be long, challenging, and disruptive for every organization involved. Failed mergers often fell apart because of poor planning and even poorer execution. While it's no substitute for a diligent and thoughtful planning process, M&A process management software can go a long way in supporting and facilitating a successful deal.

To better understand how software can help, it's important to first know how the M&A process works. Then, we'll cover the capabilities of M&A process management software and provide an overview of some of the main players in the industry.

The M&A Process

While the M&A process takes a slightly different form depending on the parties involved, it usually boils down to 5 steps:

Step #1: Acquisition Strategy and Deal Sourcing

The first step of the M&A process is always determining what a good investment opportunity looks like and then finding it. For many firms, this means building an acquisition strategy and investment thesis, where you consider the current market, your financial positions, and future portfolio projections.

M&A pipeline management software can help you develop a strategy and a sequence of goals. You can use it to create profiles for the ideal candidate that include company size, financials, products or services offered, customer base, culture, and more. It's important to set general criteria at the outset so you don't waste time on candidates who don't meet your thesis.

Once you determine this strategy, it's time to use your deal sourcing software to identify the most relevant investment opportunities.

Step #2: Contact and Negotiation

Next, it's time to contact the investment opportunities that your firm deems worthwhile. At this stage, M&A process management software that is integrated with a CRM or has data warehousing capabilities and services is a must: sensitive and often confidential data will be circulated and needs to be protected but accessible to relevant parties. This data also needs to be organized in a useful way, which your tech stack can help with.

At this point, your firm should build valuation models to create the initial deal. There will be a period of negotiations between the buy-side and sell-side, after which the deal moves into due diligence. At this stage, you'll need a virtual data room (VDR) that keeps your sensitive information secure while it's being passed back and forth between the two sides of the transaction.

Step #3: Due Diligence

Due diligence is where both sides of the deal ensure everything is in order before finalizing the transaction. It includes diving deeply into the organization being acquired to determine everything is as it should be, from processes and finances to employee information and more.

The due diligence process is often long and complex but an incredibly important step of the M&A process. Any issues or challenges not found here may turn a potential golden investment opportunity into something your firm wishes it never touched. You'll want your M&A process management software to help you organize and act on all the data from this step.

Step #4: Transaction and Closing

Once due diligence is complete, the final purchase and sale contracts are written and signed, and the deal is considered closed. M&A software with a VDR and diligence management features will be essential for this process.

Step #5: Integration

All the background information your M&A process management software has collected up through now will be crucial to making the notoriously difficult integration step a little easier. Integrating the two organizations is a years-long process that often takes longer than the previous four steps combined.

What Is M&A Process Management Software?

M&A process management software is designed to easily manage the difficulties of organizing and executing M&A processes and workflows. Usually, these tools include features for managing the various parts of a deal's lifecycle, including pipeline, diligence, and integration management.

Basic Features of M&A Software Tools

When evaluating different M&A tools, each one should have these foundational features, regardless of its specific role in the M&A process:

  • Efficient workflows: Rather than force your team to work across multiple software platforms, aim instead to streamline communication and document management into a single workflow.
  • Secure document storage: ID protocols, custom allowances, two-factor authentication, and user- or role-based permissions should be a part of any software you've chosen to use.
  • Analytics: Depending on your needs, you should be able to either create reports and dashboards within the tool or easily export the data into dedicated analytics software to enable your firm to make better decisions.
  • Delegation and communication: You should be able to assign tasks and roles for projects, as well as effectively communicate across the firm.
  • Integration: Especially because you'll likely procure a few different tools to complete your M&A process management software stack, each platform needs to be able to "talk" to one another to ensure data doesn't become siloed.

The M&A process has many different components, and each step often has several possible solutions that can help. Here are a few different types of tools to consider adding to your stack:

  • Sourcing: Sourcing tools enable M&A professionals to quickly identify the companies that match their investment criteria. Typically, deal sourcing platforms allow dealmakers to filter and search companies by geography, company stage, industry, financials, and other key data points to build relevant outreach lists.
  • Research: Research is one of the core components of the M&A software market. Research tools help you learn more about the industries you're playing in, including comparables/valuations, growth rates, deal volume, etc. There's a lot of overlap between sourcing and research tools.
  • Pipeline management: One of the most important tools for any firm is one that tracks its deal flow and pipeline, or a CRM. These are often the most important part of pipeline management, as CRMs can serve as a single source of truth for contact and company data and are often the integration point for the rest of your tech stack.
  • Diligence management: Many software providers offer a virtual data room (VDR), which functions as a secure repository for files and data associated with deals.
  • Post-merger: Post-merger software is perhaps the most difficult to define because the software used will depend on the organizations in the deal. Project management software is usually the most helpful here, as it's often built with the express intention of improving and streamlining workflows in organizations.

In the section below, we'll outline various software types that meet these parameters, as well as give some examples of M&A software companies.

Types and Examples of M&A Process Management Software

Deal Sourcing Platforms

Deal sourcing platforms are often the first stop for private equity firms, investment banks, and other financial institutions looking for an investment opportunity. Firms will often use a combination of different deal sourcing platforms to find all the information they can about potential investments, as each usually brings something different to the table.

However, the most valuable deal sourcing platforms are those that offer dealmakers insight into private markets, since data about private companies is notoriously scattered, scarce, and difficult to manually piece together. Here are a few examples of deal sourcing platforms:

  • Sourcescrub
    Built by private equity and investment professionals, Sourcescrub is the market-leading, AI-powered deal sourcing platform, with over 150,000 sources and 15 million companies that give dealmakers the most accurate, complete, and contextual view of private markets. Platform features and functionality like AI-assisted list building, custom scoring, private company data signals, pre-built CRM integrations, real-time target alerts, and conference intelligence enable dealmakers to see more deals and win more often.
  • DealRoom
    A Netherlands-based company, is a data and intelligence provider focusing on startups and tech ecosystems. The company scrapes information from a mix of data sources, including those that are publicly available, to compile company profiles based on what they find and helps dealmakers learn more about potential investment opportunities.
  • Cyndx
    While other deal sourcing platforms tout a combination of both human and AI-powered data processing and vetting, Cyndx focuses more on AI, machine learning, and natural language processing (NLP). It offers solutions for dealmakers looking for an investment and startups looking to find investors.

Research Tools

In combination with deal sourcing platforms, research tools can help map out markets and industries and focus more on the macro trends that affect deals. While you can find information on specific companies with research tools, they are generally better suited to learning about global or societal trends and changes. Here are two examples of M&A software companies that specialize in research:

  • Sutton Place Strategies (SPS)
    Known for its reports on the state of private equity and other industries, SPS is a key provider of insights and statistics for firms and other M&A companies. Their platform integrates with many popular CRMs to help streamline the deal flow process, even offering notifications and alerts based on your firm's particular needs.
  • Grata
    Grata offers a platform to make it easier and faster for dealmakers to get the visibility they need to gather relevant data on target companies as well as entire markets and industries. Firms can then build better, more customized lists and find target opportunities that match their investment themes.

M&A Pipeline Management Software

Investment bankers and private equity firms often use M&A pipeline management software to build target lists, track the market and M&A trends, and monitor multiple deals in various stages. Corporate development teams usually manage multiple M&A deals concurrently while seeking new opportunities, and pipeline management software helps these teams manage and organize both ongoing and potential deals.

Customer Relationship Management Systems (CRM)

One of the key pieces of software in the modern dealmaker's tech stack, a CRM is usually where firms keep all information about target and portfolio companies. While there are many different CRMs available, including those purpose-built for the M&A industry, the goal is to ensure target investments are properly handled and engaged with throughout the deal flow process.

  • Salesforce
    One of the most popular CRMs, Salesforce is used in nearly every industry. Highly customizable and feature-rich, its extensibility can also prove to be difficult for firms that just want a CRM without a lot of fuss. If your firm is willing and able to provide the resources to customize Salesforce, it is a proven platform to help streamline your entire M&A process.
  • Microsoft Dynamics 365
    While Microsoft's CRM has been around for a decidedly shorter amount of time compared to Salesforce, it is still an incredibly robust and powerful platform backed by one of the largest software companies around. Also designed to serve many industries, Microsoft Dynamics 365 can help firms with their M&A pipeline management if they have the development and IT support to customize the platform to fit their needs.
  • DealCloud
    DealCloud was specifically designed for use within the finance industry and offers much more than "just a CRM." Their platform aims to help firms throughout the entire M&A process, including handling pipeline, portfolio, and even document management.

Due Diligence Management Software

Due diligence management software aims to effectively organize the entire due diligence process while also allowing for easy, secure document sharing and storage. Many of these platforms will also offer a virtual data room and allow files to be attached to specific diligence requests, roles to be assigned, due dates set, etc.

  • Centrl
    Centrl offers various diligence management tools that give a comprehensive and complete diligence management experience. Centrl gives users data subject rights management, data inventory & mapping, preference and consent management, turnkey cookie consent, privacy impact assessments (PIA and DPIA), and privacy analytics & assurance.

Virtual Data Rooms (VDRs)

VDRs are designed to securely store documents and data within the cloud, enabling easy sharing between stakeholders, especially in the early stages of a deal.

  • FirmRoom
    FirmRoom offers a VDR with a robust set of features in the M&A process management software space, including view-only access, customizable document permissions, and multi-factor authentication.
  • DataSite
    Backed by one of the leading firms in the industry, Datasite Diligence helps users keep, organize, retrieve, and collaborate on files in a secure environment. Its search feature allows for almost instantaneous data retrieval, while the visual dashboards and analytics tools let users monitor data and filter by document, role, user, and more.
  • Intralinks
    Intralinks is a powerful tool for transferring data across and throughout organizations. While it can be more expensive than many other VDRs, Intralinks has been in the business for quite some time and provides all the necessary tools for making a virtual data room safe, secure, and accessible.
  • Ansarada
    Ansarada is a VDR specifically built to solve data security issues and the associated problems with data and information sharing. Many clients praise the user experience and the customer service that the platform offers. Ansarada is also known for its sophisticated AI-powered workflow features.

Post-Merger Integration Software

Post-merger integration (PMI) software aids in integrating two companies post-transaction. The software can be specifically designed for integrating two companies or firms, or it can be designed to help with communication or project management in general.

General M&A Integration Software

  • Devensoft
    Built to help companies collaborate and integrate post-merger, Devensoft originally sought to end the inefficiencies in how current M&A processes are often done. They've expanded their focus to include more end-to-end M&A process management, but they specifically excel at the complicated workflows involved with post-merger integration.
  • Midaxo
    Midaxo is another all-in-one solution that aims to provide firms with a centralized platform for everything, including pipeline management, due diligence, and PMI. The company was originally founded to ease the inefficiencies, increased risk, and poor collaboration of traditional M&A processes.

Project Management Software

While much of the M&A industry does not yet use project management software, it can be invaluable for managing many parts of the M&A process and pipeline. Often, these tools have robust feature sets, extensive customizability, and workflow automation to help firms better manage their processes at any point in the deal. That said, project management software may be best suited to post-merger integration as their main focus is to make work happen more efficiently and collaboratively.

  • Asana
    Asana is a work management platform designed to ease the complexity of work across organizations. With Gantt charts, automation, calendars, Kanban boards, and more, Asana is built to help teams work on individual tasks and large projects in a collaborative environment.
    Touting themselves as a "Work OS," streamlines and centralizes work across organizations to connect teams, bridge silos, and maintain one source of truth. The software offers automation, dashboards, and an incredibly customizable workflow engine to help teams work the way they need to succeed.
  • Wrike
    Wrike is an all-in-one collaborative work management platform built to manage projects, organize work, enhance collaboration, and accelerate execution. The company describes itself as The Most Versatile Work Management Platform, specifically calling out the features that let each person, team, and department work in the way that works for them.
  • Smartsheet
    While the name may lead you to believe Smartsheet only offers fancy spreadsheets, the work management platform actually offers just as much as the others on our list. From dashboards and Kanban boards to calendars and automation (and, of course, spreadsheets), Smartsheet offers a scalable solution for collaborative work across organizations.

Collaboration Platforms

A good collaboration and communication tool is essential for any organization's success and, in a remote working world, one of the most important pieces of software for many companies.

  • Slack
    At one point, Slack was considered a simple chat tool, but it has since become the "digital headquarters" for many companies. It can be customized to fit the needs of nearly every organization, including private equity firms, mainly due to its open feature set and massive number of available integrations.
  • Google Workspace
    Google has been operating in the collaboration space for a while, and those looking for secure and collaborative documents, from spreadsheets to presentations, needn't look further. Google Workspace offers ways for work to happen across the globe as easily as in the same room, with tools to help communication and collaboration across many different mediums.

How to Choose the Right M&A Process Management Software

The current software market is overflowing with vendors, which can make selecting the right M&A process management software overwhelming. Once you match your firm's requirements to each tool's feature set, though, you can determine what's right for you. To help, we've laid out a few key things to check for in your selection process.

Check Security Measures

Each stage of M&A involves highly confidential documents, so security must be a priority. Look for platforms that offer two-factor authentication, digital watermarking, and robust encryption methods. Certain certifications and compliance measures, such as ISO 27001, SOX, and SOC 2, can help you determine which software puts your data in safe hands.

Test for Ease of Use

Most software providers provide potential buyers with a free trial, which is the best way to see if the product is intuitive and has the features to fit your firm's specific needs. Making sure that the software you select is capable of meeting the demands of daily use is essential, and a trial is a great way to do that.

Read Reviews

Reviews allow your team to see what other users say about and have experienced with the software. Check out sites like G2, Capterra, and other review aggregators to get an idea of the pros and cons of the platform. Other sites, such as Reddit and Quora, may offer some assistance and are less likely to have paid reviews that may skew ratings as the communities are firmly against self-promotion.

Search for Support Issues

Your chosen M&A process management software must be considered a partner in your firm's day-to-day activities. So, evaluate it as such. Search the web for the most popular support issues and complaints users have had to see if it's something that will matter to your firm. Also, check for feature requests to see if something may be missing from the platform that you would consider a dealbreaker.

Evaluate the Cost

Surprise costs can spring up when trying to get a good deal on a new software package. Make sure to get quotes for competitors' versions of the software and make comparisons based on all that's included. Support hours and costs, implementation fees, integration prices, and more can add to the bottom line of deploying a new piece of software. Additionally, look beyond just the sticker price and consider the length of time it will take you to successfully implement that software into your firm.

Building Your Tech Stack

There are many M&A tools and software from which firms can choose to build the perfect tech stack for their needs. Technologically- and data-driven firms have been shown to get higher returns and make more deals than firms that do not take advantage of these types of software. The key is to choose the components that make the most sense for your firm's goals and processes.

For more information on what the modern dealmaker's tech stack entails, check out our guide to the three core components every firm should have (plus one to launch yours ahead of your competition).