AI and M&A: Processes and Trends

Erik Mills

3 min read

#DataSite News Update: Oct 19, 2021

Virtual data rooms are a tool without which many M&A deals would come to fruition. It is a solution irrevocably tied to the business world, but like with any tool, it has different use cases. At first, it was just another step in the development of data room technology, but now we can be certain that it does much more than just store sensitive files. What is the future of virtual data rooms, and how does AI technology fit into the mix? 

AI in virtual data rooms

Artificial intelligence is already utilized in some of the most modern virtual data rooms. The virtual assistant helps when using the search function, report generation, and other data room features.

Although the use of AI in virtual data rooms isn’t yet as widespread as virtual assistants on our smartphones, it is only a matter of time when artificial intelligence becomes a standard feature in every virtual data room. 

Providers like Ansarada are already equipping their clients with AI-assisted predictions and automation features, and more providers are yet to offer AI-based perks. This technology will simplify a lot of processes in the business world, including M&A deals.

AI in the M&A deal-making process

There are two sides to every deal. The buy-side wants to ensure that the asset that they are purchasing will profit, and the sell-side aims to be as transparent with their paperwork as possible. The cooperation of these two sides can be enriched through AI. 

Reviewing documents and data through the use of machine learning will increase the speed with which due diligence is conducted. A computer fed with documents from the sell-side and the buy-side will immediately know what kind of parameters are missing or what kind of growth we can expect to see in the upcoming years.

This is also important for the sell-side, as they will also know what kinds of files they still need to prepare and in what areas they need improvement for a bright future. Not to mention that it will greatly help in categorizing and redacting sensitive data.

People are good at recognizing patterns, but machines are better at calculating and predicting from the input data. And the best part is that artificial intelligence continually learns new behaviors. The more files you feed it with, the more proficient it will be at deciphering what the future has in store for both sides of the deal. 

Global perspectives according to Datasite

AI is not the only thing changing and influencing the world of virtual data rooms. Many other aspects will change the online storage landscape when it comes to M&A deals. According to Datasite, AI will streamline business deals in the following ways.

• Faster due diligence. Over 56% of practitioners predict a significant increase in the speed with which due diligence takes place. They believe that due diligence will only require a month within the next five years. 

• AI development. Nearly a third (30%) of practitioners see the potential in AI and believe that in the next five years, it will be the most transformational development in virtual data room history. 

• Digital maturity. In the upcoming years, businesses will reach a new level of technological sophistication and digital maturity. According to 67% of practitioners, this will impact the industry-wide M&A processes.

• AI and due diligence. As we have mentioned earlier, AI will accelerate the processes in M&A deals. Over 30% of practitioners have the same view on the matter and are confident that an AI-enabled virtual data room will improve the workflow of such an event. 

Conclusion

Nobody can fully predict the future, but we can guess with a high probability what will happen in the world of virtual data rooms. 

According to the report done by Datasite, we are almost certain that AI will improve the way we do our deals. That is something we are waiting for as well. For the current state of virtual data rooms, check out some of the top providers on our main page.