AI tools speed, secure M&A processes

Jenna Kroll

Founded in 1968 in St. Paul, Minn., Datasite specialized in financial printing, marketing and communications for regulated industries. In 2018, the company went through a major transformation, divesting its legacy businesses to focus solely on its M&A platform. 

BankBeat spoke with Jenna Kroll, Datasite regional sales manager, based out of Chicago, about how tech is changing M&A.


How does Datasite characterize the particular workings of a financial merger?

Jenna Kroll: Typical deals require analysis of huge amounts of data in a relatively short period of time. When time is money, tech that speeds up the often lengthy M&A process is critical. That’s why AI-powered tools that work faster by automating tasks, reducing human error, and ensuring greater regulatory compliance are gaining interest.

For example, when it comes to selling a bank, one of the most challenging parts is organizing and preparing the files needed for review by potential buyers. Investment banking analysts often spend weeks reviewing thousands of files to figure out how to organize them and prepare them for a transaction.

AI and machine learning can sift through these large volumes of data and suggest categories and appropriate folder locations. It turns a task that would normally take weeks into something completed in minutes.

What’s an example, other than raw speed, where AI can best us mere mortals? 

J.K.: In every M&A deal, you will have to redact content across the thousands of documents that need to be made available for various stages of the transaction. The most commonly redacted content is Personally Identifiable Information. Historically, dealmakers would redact documents manually (sometimes with black markers), which is obviously prone to human error. Getting this wrong can result in the disclosure of highly sensitive data, often with undesirable legal repercussions. AI can do a better job. 

Additionally, enhanced analytics allow users to keep track of who is looking at what in each data room, including which buyers are active, who has logged in to view documents, and what is the most actively accessed content on the project. Not only does this allow users to track deal progress from every angle, but it also helps avoid unwanted behavior that would otherwise go undetected without cutting edge tech.

What are some things tech can’t help?

J.K.: While technology is increasing the efficiency and effectiveness of the M&A process, deal-making is still a notoriously relationship-driven business and still depends on some key soft skills, like strategy, deal preparation and negotiation.

Will there come a point when robots just make deals?

J.K.: Out of sheer necessity due to the global pandemic, the past year has proven that transactions can be successfully managed virtually. From online collaboration and document storage to video conferencing — technology adoption is at an all-time high for M&A practitioners. Virtual deal-making is definitely here to stay.

However, deal-making still depends on soft skills, including networking, collaboration, sentiment and confidence. Technology won’t solve all M&A process challenges. In fact, most M&A practitioners believe several areas of the M&A process simply can’t be automated, like strategy, negotiation and deal preparation. These require copious amounts of human intelligence, expertise and experience to get right. No technology or computer algorithm can yet duplicate everything needed for a successful M&A strategy.

Are there any unique regulatory protocols Datasite has to watch out for?

J.K.: Adherence to data privacy regulations is of utmost importance, and new rules emerge regularly. For example, the California Consumer Privacy Act recently created new consumer rights related to the collection, processing and retention of personal information obtained by U.S. businesses. 

Tools like redaction AI not only help ensure compliance with privacy regulations such as CCPA, but they also protect strategic and commercially sensitive data at the click of a button. Using unintegrated tools like, again, a black marker to redact documents manually and then scanning and uploading them back into your data room, takes many, many hours and is prone to costly human error. With integrated AI tools and permissioning, our clients are always in control of their data.

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