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Viewpoints

| 1 minute read

Digital Transformation of Diligence Enhancing M&A

In today’s environment of high capital costs, the scrutiny of potential buyers has significantly intensified. Financial leaders must prepare accordingly. The average time from the initiation of a seller’s go-to-market strategy to a successful close has increased materially over the last two years compared to historical norms. Buyers are dedicating more time and resources to a comprehensive diligence process before closing, ensuring that all areas requiring post-close investment are fully reflected in valuations. 

To navigate these challenges, financial leaders should proactively invest in financial transformation ahead of potential transactions. As digital transformation continues to reshape the diligence landscape, sellers must be equipped to utilize data analytics, key performance indicators, and relevant operational metrics to effectively communicate their business’s value proposition in real time.

New tools and technologies are empowering financial leaders to seamlessly capture and articulate value, such as VUE by Riveron, an automated reporting solution. It begins with value-based performance measurement and management design, followed by tech-enabled execution, providing robust management and stakeholder insights.  

Now more than ever, financial leaders need to enhance their digital financial reporting capabilities to deliver reliable, rapid, and insightful analyses. Emphasizing data analytics will be crucial in capturing and articulating value, ultimately maximizing investor confidence and shareholder returns in the future.

Financial leaders continue to upgrade financial data systems and controls to make well-informed strategic decisions about M&A opportunities. Accelerated digital transformation has proven to be a key strategic asset to both buyers and sellers as they transform their financial close and reporting systems and processes. Accurate financial reporting provides accurate, clear and transparent views of the company’s financial health and forecasts, which are essential for potential buyers or investors during the due diligence process. Financial executives are strategically managing balance sheets and reviewing the details of the company’s profitability. Compiling and forecasting financial performance and other necessary due diligence documents for any M&A agreement is a significant process requiring substantial company resources. Having confidence in your financial data is critical in structuring deals, by providing clear insights into historical and forecasted cash flow, debt levels and other financial metrics.

Tags

accounting & finance operations, business performance improvement, capital markets advisory, technology enablement, transaction services, private equity, office of the cfo, mergers & acquisitions, lenders, consulting professionals, artificial intelligence