The impact of digitalisation on M&A and Private Equity

The world of mergers and acquisitions (M&A) and private equity (PE) has undergone a significant transformation in recent years, driven by the rapid advancement of digitalisation. Digital technologies have improved various aspects of these industries, including deal sourcing, matchmaking, due diligence, valuation, and parts of the post-merger integration.

Streamlining sourcing and matching

Digitalisation enables the collection and analysis of vast amounts of data, providing valuable insights that aid in the matchmaking process. Through data analytics, dealmakers can identify patterns, similarities, and potential synergies between companies. By leveraging data-driven intelligence, M&A and PE professionals can identify the most suitable counter-parties based on factors such as market positioning, customer profiles, financial performance, and growth potential. Moreover, digital tools offer sophisticated search and filtering capabilities that enable professionals to narrow down potential counter-parties based on specific criteria. This enables advisors to identify perfectly-matched companies based on industry, geographic location, financial metrics, growth rates, and other relevant factors. This targeted approach helps match buyers with sellers that align with their strategic objectives and investment criteria, saving time and effort in the process and enabling foremost advisors to address the best possible buyers significantly outside their usual network. As a result, digital channels, foremost online deal platforms, accounted for more than 20% of the deal-sourcing activities in 2022, up from 5% in 2016.

Automation of Due Diligence

Data analytics plays a vital role in the due diligence process by enabling companies to extract meaningful insights from large volumes of data. Traditionally, due diligence involved a manual review of documents and financial statements, which was time-consuming and prone to human error. With data analytics, companies can now automate the analysis of financial data and other relevant information. Such automated data analytics systems employ advanced algorithms to analyse various data sources for inconsistencies. By scanning through these data sets, these systems can quickly identify potential red flags that warrant closer scrutiny. Red flags can encompass financial irregularities, legal or regulatory non-compliance, operational inefficiencies, or other indicators of risk. These automated systems are designed to flag inconsistencies, outliers, and patterns that may raise concerns during the due diligence process. Automated data analytics systems can also assess compliance with regulatory requirements. By cross-referencing the target company’s activities against relevant laws and regulations, these systems can identify potential violations or gaps in compliance. As a result, foremost larger M&A transactions can be completed more cost-effectively.

Improving post-acquisition integration

Digitalisation plays a crucial role in post-merger integration and value creation. Advanced project management tools, collaboration platforms, and automation technologies enable smoother integration of systems, processes, and cultures. Especially if the acquisition needs to fit into a larger operating group, digital data solutions significantly simplify portfolio management efforts.  By consolidating and aligning data, organisations gain a holistic view of their operations, financials, and customer information, facilitating better decision-making and the identification of synergies.

Furthermore, digital tools enable efficient collaboration and communication among teams involved in the integration process. Cloud-based project management software and virtual meeting platforms foster real-time collaboration, regardless of geographical location. This transparency and cross-functional teamwork accelerate the integration process. Digitalisation also allows for process automation, reducing manual effort and increasing efficiency. Organisations can utilise robotic process automation and workflow automation tools to streamline repetitive tasks, freeing up resources to focus on strategic integration initiatives.

We see the importance of digitalisation efforts, when it comes to creating additional value for our portfolio companies, especially when it comes to identifying cross-synergies between different companies. Without sophisticated data tools, we’d probably miss out on quite a few synergies”, says Fabian Kroeher, Executive Director at Winterberg Group.

Source: McKinsey&Company

Improving deal quality

Digitalisation can significantly improve deal quality in M&A transactions by increasing transparency on both the buyer and seller sides. Transparency plays a crucial role in reducing the number of buyers who lack the financial capability to fund the deal and sellers who are reluctant to sell. On the buy-side, digitalisation allows potential acquirers to showcase their financial strength and credibility. Online platforms and databases provide access to information about a buyer’s financial history, track record, and available funds. This transparency helps filter out buyers who may not have the necessary financial resources to complete the transaction, ensuring that serious and capable buyers are involved in the deal process.

Similarly, on the sell-side, digital platforms could enable sellers to convey their intent to sell and provide relevant information about their company’s financials, operations, and growth prospects. This transparency can ensure that only sellers who are genuinely interested in selling their business participate in the M&A process, reducing time wasted on negotiations with sellers who are not committed to a deal. By leveraging digitalisation, M&A professionals can conduct thorough background checks, verify financial capabilities, and assess the seriousness of both buyers and sellers. This leads to improved deal quality as it minimises the likelihood of wasted efforts, failed negotiations, and disappointing outcomes.

Overall we still see quite a few processes, where sellers don’t really intend to sell or buyers, who enter processes with no funds. We really hope that the overall deal quality can further improve through implementing digital processes – otherwise, it gets pretty frustrating from time to time”, says Fabian Kröher, Executive Director at Winterberg Group.


The digitalisation of the M&A and PE field has unleashed a wave of innovation, transforming traditional processes and unlocking new opportunities. The current level of implementation helps buyers and sellers to find each other easier, have more efficient due diligence, as well as improve portfolio management efforts for private equity players. However, there are little to no solutions in the market to help improve the deal quality. Nonetheless, the future of M&A and PE lies in further digitalisation and further process streamlining.