Conclusion: Mining Expert Insights

This report underscores the growing degree of complexity involved in M&A transactions. No longer can dealmakers focus solely on the P&L, cash flow and balance sheet to evaluate a company’s strengths, weaknesses and, ultimately, transaction value. Sellers and buyers alike must assess the business’s ESG practices, its digital capabilities, its technology platform, and its IP assets as closely as they scrutinise its financials. To meet these requirements, many corporates and PE firms are hiring experts in these areas. In many situations, however, even companies with expanded internal teams need to access external expertise. A growing array of external advisors, including insurers, cyber security specialists, environmental scientists, IT professionals, banks, law firms, and others with a wealth of specialist expertise are on hand to advise the different parties to M&A deals. Whichever types of experts are called in to help, dealmakers must challenge their advisors to deliver in the following areas:

Quantifying and valuing assets and capabilities Insurers and others are putting sophisticated analytics capabilities to work to take advantage of the vast array of public and client-specific data at their disposal. These tools can help quantify a seller’s or target company’s ESG strengths, IP assets and digital performance and, ultimately, assign a value to them.

Identifying and mitigating risk The same tools can be put to work to identify specific ESG vulnerabilities that sellers and IPO candidates need to address prior to transactions. Cyber risks can be similarly uncovered, and weaknesses in a company’s technology assessed, with a view to addressing them before or after a transaction.

Improving disclosure Demands from regulators and investors for detailed disclosure by all transaction parties are only going to grow, with ESG, cyber and data practices increasingly in focus. Specialist advisors’ ability to conduct forensic performance, risk and valuation assessments in these areas will be essential to ensuring proper disclosure.