Why Your M&A & Due Diligence Team Needs AI Yesterday, Not Tomorrow!

In the fast-paced Mergers & Acquisitions, one wrong move could cost you billions - ask Hewlett-Packard! Back in 2011, HP made headlines with an $8.8 billion write-off after buying Autonomy. What went wrong? A breakdown in due diligence - a human error in analysing the financials led to one of the biggest corporate missteps in recent history.

Fast forward to today, and the game has changed dramatically. Artificial Intelligence—the digital powerhouse is now reshaping M&A and its due diligence in ways we never imagined.

The Black Knight Example: AI to the Rescue

Let’s look at a more recent example — Intercontinental Exchange’s massive $13.1 billion acquisition of Black Knight. The complexity of the financial and legal frameworks involved was no small feat, the kind of deal that usually takes months (if not years) to iron out. However, with AI at the helm, due diligence was not just quicker; it was smarter and more reliable.

Instead of relying on teams of analysts to sift through mountains of financial reports and legal documents, AI did the heavy lifting. Think of AI as a tireless analyst, working around the clock without coffee breaks, spotting risks that could have been deal-breakers before humans even realised they existed. Moreover, that is just scratching the surface.

AI is The Tech M&A Never Knew It Needed

AI is no longer a buzzword in M&A; it is turning out to be a tool for survival in a competitive market. Predictive analytics enables firms to dive into historical data and forecast both risks and opportunities, all while AI scans through massive datasets, documents that would take human months to process.

Financial inconsistencies, compliance issues, or hidden risks? AI flags them in real-time!

Even better, Robotic Process Automation is stepping in to tackle the tedious stuff, like analysing financial reports or cross-checking legal documents. It's not just about speed anymore — it’s about getting it right the first time, minimising human error, and saving companies millions.

HP’s Autonomy Debacle: What Could’ve Been

Let us rewind for a moment, shall we? What if HP had access to AI tools back in 2011 during the Autonomy acquisition? AI could have caught the financial manipulations that human analysts missed. The entire disaster might have been avoided, preventing one of the most infamous write-downs in the history of M&A.

Today, this kind of AI-driven insight isn’t just a luxury — it’s a necessity. Right now, only 16% of M&A deals are using generative AI, but experts predict that number will skyrocket to 80% in the next three years. And it’s no surprise why. Companies that have embraced AI in their deal-making processes are already reaping the benefits.

85% of early adopters report AI surpassing their expectations.

The Catch? It’s Not All Smooth Sailing

Of course, AI isn’t fool-proof. Like any tool, it’s only as good as the data you feed it and how you train it, refine it. Bad data means bad insights. And let’s not forget the ethical and privacy concerns that come with automating large parts of the M&A process. There’s also the looming spectre of cybersecurity risks as we increase our reliance on technology.

But here’s the key takeaway: while AI is revolutionising the M&A space, it still needs a human touch. AI can crunch numbers and flag risks, but human intuition and judgment are irreplaceable in making the final call.

The Future is Bright: A Human-Tech Partnership

So, what does the future hold? M&A processes will become a harmonious partnership between AI-driven insights and human expertise. AI will continue to analyse data faster than any human could dream of, but the complex, high-stakes decisions will remain firmly in the hands of experienced professionals.

Where Do You Stand Today?

Are you already using AI in your M&A strategies? Is there a room for innovation in your deal-making process? Let’s chat! I’d love to hear your thoughts on AI unlocking new opportunities for your firm.

Share your ideas in the comments below, or feel free to DM me directly for an obligation-free consultation about how AI impacts your firm and its journey for digital transformation.