AI-Assisted M&A for automation multinational
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Looking to capture additional growth through M&A, a global automation player discovered companies that didn't appear in databases, used trend analysis to rank emerging companies and analyzed their IP.
The company grew its validated M&A target list 5x, ~70% of them novel, in just under 2 weeks, where speed to value is key.
The Challenge
A global automation company wanted to capture additional growth through M&A, yet it was increasingly difficult to source potential portfolio targets in fragmented markets, niche areas and emerging technologies.
They found that the full picture of a target company’s strengths and challenges was often obfuscated, lacking context of market dynamics and trends.
There were limitations in the desired results, as only few "pure" players were left on the market and multiples were high. Due to the high market fragmentation, some interesting players, esp. bolt-ons, weren't visible. What's more, information is highly scattered and requires technical know-how. It was extremely tough to evaluate the "real" fit and collect sufficient information to make an educated decision.
There were also limitations in the target scanning process: there was no consolidated platform employing multiple sources, as this would require various activities including database scanning, web search, and expert interviews. Moving forward a codified process with a consolidated tool, each scan would remain a one-off effort.
The Approach
The company used Research Studio to mine billions of open sources of knowledge to identify, screen and enrich potential M&A target data.
This included:
- 400B+ web pages
- 120M+ patents
- 100M+ publications
- 50K+ news sources
- 12K+ industry conferences participants
The team used the platform to surface and evaluate targets by reviewing relevant criteria (e.g. product and technology offerings) and conducting initial risk assessment (e.g. checking for conflict or litigation). This included a highly contextual SWOT analysis, drawing on 1.5 billion trends, IPs, whitespace analysis, ESGs, and more.
The Results
With an exhaustive M&A candidate list, using precise criteria, the company grew its validated M&A target list by 5x, with 70% of them previously unknown to the team. They went beyond the usual suspects – sourcing potential bolt-ons in untapped regional markets, emerging tech fields and trending sectors.
Each target choice was backed up by clear evidence setting out the best valuation and the rationale behind each pick.
And this entire process took just 2 weeks, where speed to value is key.
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Root-Cause
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