Creating value by turning to digital solutions – it’s no longer just the stuff of dreams, but a very real driver of productivity, and one increasingly used by companies in the mergers and acquisitions sector.
Often referred to simply as M&A by those in the know, mergers and acquisitions involve all the financial and legal transactions that shape our national economic fabric. In fact, it’s the most common form of external growth there is!
Despite the recent pandemic, M&A is doing rather well: the value of the industry’s deals has returned to record levels, according to Challenges magazine, April 2021.
We’ve decided to devote an entire article to this far from trivial topic. And to mark the occasion, we’re pleased to be able to quote Arcéane, a mergers and acquisitions firm specialising in the SME sector.
- Key stages of a deal
- Heading towards a 100%-digital process?
- Streamlining the signing phase
- Testimony from our M&A client Arcéane
Mergers & acquisitions: the headlines
According to Daf magazine, mergers and acquisitions...
means the purchase of one or more companies by one or more other companies, acquisitions that can lead to the creation of a new entity
And speaking of ‘new entities’, the M&A process usually takes one of three forms:
- horizontal: between companies in the same industry,
- vertical: between a company either upstream or downstream in another company’s production chain, but where both are from the same industry,
- conglomerate: between companies operating in different markets..
👉 M&A consists of a complex process of transactions (often known as deals), combining specialist knowledge of the financial and legal aspects of corporate law.
👉The ultimate goal of any M&A process is to create value! 🌟
Some of the most frequently encountered issues during the M&A process can include topics as varied as shareholdings, a new entity’s technological architecture, pre-deal interdependencies...
Stages of M&A deals
According to experts at Deloitte, there are 4 key phases upstream, during and downstream of the transaction itself:
1️⃣ preparing for the transaction
“Developing a perfect understanding of the M&A target to arrive at the right valuation”.
2️⃣ carrying out the transaction & due diligence*
- “Anticipating transaction-related risks”.
- “Confirming the drivers of value creation”.
- “Identifying areas of negotiation in order to stay in the driving seat throughout the transaction process”.
3️⃣ closing, integration and separation
“Guaranteeing the continuity of the sold business, making sure things are up and running from Day 1”.
4️⃣ post deal value creation
Post-deal management “to maximise value creation”.
* *Legally-binding letter of intent between the buyer and the seller, the former drafting it to express their willingness to enter into negotiations with the seller.
🎯 🎯 To really get to the heart of the matter, the Deloitte website has plenty more on this topic.
M&A: is the future really digital?
Digitisation has been an important factor in the world of mergers and acquisitions for several years now.
In a research report from 2018, consultancy firm Accenture explained:
turning to digital technologies to close mergers and acquisitions more quickly could offer buyers an additional €15–30 million and sellers an additional €15–45 million in value
Generally speaking, digitisation means we can break free from the traditional ways of managing transactions and create more value by:
- closing deals faster,
- reducing transaction costs,
- stimulating growth among the stakeholders involved,
- increasing agility and efficiency throughout the entire M&A process!
According to Challenges in the same press release mentioned above, new technologies can also help better manage talent retention:
“67% of transactions see delays in achieving synergies because of poorly addressed cultural issues; you need a precise plan of action before introducing new ways of working that can motivate your target’s talent” .
The pandemic has clearly accelerated the adoption of new technologies and artificial intelligence, particularly when it comes to remote meetings and data management.
📖 My colleague Thomas explored the topic of COVID-related business digitisation in a recent blog post.
Some M&A firms made the switch to 100%-virtual closings during the Coronavirus crisis, having to guarantee significant rigour and acuity.
In this context, the question of choosing trusted partner solutions is vital:
- How do you ensure extremely sensitive data is protected remotely?
- Which partner is best for which stage of the transaction?
As an expert in eSignature solutions, we can offer all the advice and support you need to sign and close your deals entirely securely and remotely!
Streamline the signature stage when closing a deal
As we mentioned earlier, the pandemic has shifted the goal posts considerably: from getting handwritten signatures in person to sending documents by email that have to be printed out, signed and scanned...
Imagine the hassle when signatories are based in different countries and in different time zones; getting deals signed can quickly become an intractable process... 😱
What do M&A firms need to sign documents electronically?
- a trusted eSignature partner
- a working Internet connection
- a device: computer, mobile, tablet
☝️No installation required for an SaaS solution like Yousign: the entire process is outsourced by us, in what you often hear referred to as the cloud.
It’s also important to note your signatories don’t need to create an account to sign, only the creator of the process needs to do that.
For what kinds of documents?
- letters of intent (or due diligence)
- confidentiality clauses (or non-disclosure agreements)
- letters of engagement
Which features are included?
Yousign offers a range of features that strengthen the signing process:
✔ time-stamped and archived audit trails,
✔ consent agreements,
✔ automatic reminders,
✔ two-factor authentication,
✔ role and permission management...
What are the benefits of electronic signatures?
As a mergers and acquisitions firm, now you can:
- guarantee the security and regulatory compliance of your signature process in terms of eIDAS,
- spend less time signing and more focussing on the transaction process,
- save productivity and money (say goodbye to travelling for signatures and the costs of face-to-face signing),
- master the process end-to-end while monitoring the signing process in real time, including all parties to the contract, their lawyers, the bank, and the lender (if there is one)
- avoid waiting around for signatures (unlike scanning...) because the process is immediate.
To learn more about all types of signatures that fall under the eIDAS regulation and find out what matches your needs, here is an article we wrote on the subject.
Arcéane case study, a M&A firm specialising in SMEs
A while back, we spoke to our client Arcéane, a general mergers and acquisitions firm that deals with projects covering sales and acquisitions, evaluations and fundraising related to SMEs.
Hubert de Candé explained to us that “due to constraints related to distance and the various locations the firm operates in, we quickly had to switch to the cloud and secure contract management solutions”.
The main benefit to our daily lives? “The security specific to Yousign’s electronic signature means we no longer have to physically travel to collect them!”.