Powerful technologies, including artificial intelligence and machine learning, are taking data and analytics to a whole new level, transforming the processes of M&A in general and of deal identification in particular. A couple of recent announcements caught our eye. Earlier this week, professional services firm Alvarez & Marsal announced a new service aimed at helping private equity professionals identify potential M&A targets. And last week, tech-focused private equity firm Francisco Partners invested in SourceScrub, also backed by Mainsail Partners.
SourceScrub provides a data service for firms looking to research, find and connect with privately-held companies.
The new service from Alvarez & Marsal is called A&M Data Intelligence Gateway, or A&M DIG. Led by executive directors Tara Bilby and Mishelle Weinerman, along with chief technology officer Joey Baruch, A&M DIG aims to increase the speed of deal identification.
“We take raw government data sources and use entity resolution to identify a company throughout disparate sources, including examples such as Form 5500, patent data, and visa sponsorships,” explains Paul Aversano, managing director and global practice leader, global transaction advisory group. “By analyzing the variables throughout the sources, we can identify a company’s headcount, growth rates, geography along with other important metrics that determine companies’ validity and how they fit into a private equity fund’s strategy. In this manner, A&M DIG is able to compare companies relative to one another and provide deeper insights into the private market.”
According to Aversano, PE firms are “excited about A&M DIG’s ability to validate investment theses, provide market intelligence and identify companies for potential add-on acquisitions and roll-ups. For example, one client was looking at a platform deal in Canada and wanted insight into the fragmentation of the US market, which we were able to provide. In another scenario, we were able to identify additional bolt-on targets to a client’s pipeline that met their very specific criteria.”
The digitization of M&A has been underway for a while but has been accelerated in the Covid era. We expect to see more offerings that leverage technology for PE pros.
—Mary Kathleen Flynn