deloitte m&a focus on: analytics survey findings

Deloitte M&A

Focus on: Analytics

Key survey findings

February 2016

2 Copyright © 2016 Deloitte Development LLC. All rights reserved.

Respondent profile

While there’s plenty of talk about the growing role that data

analytics is playing in mergers and acquisitions (M&A), we

wanted to assess how important it is—from the perspective of

corporate leaders.

That’s what this survey is all about. For this issue, we talked to 500

corporate leaders (director-level or above) at large U.S. companies about

analytics. In this presentation, we’ve shared some of their high-level

insights on everything from where analytics is being used in the deal

making process to what types of data is being examined, and much more.

One thing is clear: Analytics is already playing a role in M&A, and for most

corporate leaders, they’re just getting started.

Data analytics

The practice of leveraging data

to drive business strategy and

performance. It includes looking

backward to evaluate what

happened in the past, as well as

forward-looking scenario planning

and predictive modeling.

v

Copyright © 2016 Deloitte Development LLC. All rights reserved.


About this survey of M&A Leaders

For this survey, our focus was on high-level corporate leaders

at some of the leading organizations in the U.S.—the people

whose opinions are shaping the use of technology-driven data

analytics in the M&A world.

Here’s a closer look at those who participated in our survey.

To qualify to participate in the survey, a respondent had to:

Be the owner

of a business

or work full-time

for a company.

Be at the Director

level or above in

their company.

Not work for a

not-for-profit NGO,

professional

services firm

or in the

public/government

sector.

Work in a company

with $10 million

or more in

annual revenue.

# of respondents

(n=)

Margin of error @

95% Confidence Level

500 +/- 4.5%

Sample size, confidence

interval and quotas

Survey fielding period:

December 8 – 14, 2015

v


*All percentages in this document may not equal 100 due to rounding

Key findings



Does your company deploy technology-driven data

analytics in M&A?

Is anyone actually

using data analytics

in M&A?

If there was ever any doubt

about the role of data analytics

in M&A, our survey respondents

offered a resounding answer:

68% report using technology-

driven data analytics in M&A

activities. In fact, 40% consider it

a core component of their approach.

As you can see in the graph on the right,

usage as a core component tends to

increase along with the size of the firm.

40%

28%

9%

12%

11%

Yes, a core component

of our M&A analysis

35% 29% 44% 47% 47% 58%

34%

26%

33% 24% 26%

19%

13%

12%

6%10% 4%

6%

13%

21%

6% 8%7% 2%

15%5%

11% 11% 11% 15%

Yes, in select areas

of our M&A analysis

No, but

considering it

No Don’t know/

Not sure

(n=483)

5


In the past year, how have you changed your

use of data analytics in the deal-making process?

Is analytics usage

on the rise–or is

it declining?

Over the past year,

64% of companies increased

the use of data analytics—

30% significantly increased

their usage.

13%

5%

1%

17%

34%

30%We have increased our use

of data analytics significantly

We have increased our use

of analytics somewhat

We haven’t changed our

use of data analytics

We have decreased our

use of data analytics

We don't use data analytics

in the deal making process

Don't know/not sure

6


In what stage(s) of the M&A lifecycle do you feel using

data analytics is most valuable?

Where does it

matter most?

The M&A lifecycle includes several

widely recognized stages, starting

with strategy development and

target screening all the way through

to integration. So where are firms

using data analytics the most?

When asked where data analytics is

most valuable, M&A leaders pointed

to strategy development. But the

other areas are equally interesting.

Multiple responses allowed (n=394)

21%

40%

42%

47%

49%

64%Strategy development

Target screening

Integration

Due diligence

Transaction execution

Divestiture

7


How has your company applied data analytics?How exactly

is analytics

being used?

Data analytics can be used

anywhere there’s data—and since

the M&A process is often loaded

with data at every stage, there are

myriad potential use cases.

So how are leaders really using it

today? The answers may surprise

you. The analysis of customers

and markets leads the way,

but there are many other ways

in which data analytics approaches

are being used today.


35%

37%

38%

41%

43%

55%

64%Analysis of customers

and markets

Analysis of workforce

and compensation

Vendor analysis

Analysis of contracts

and legal agreements

Analysis of intellectual

property

Analysis of plant, machinery

and real estate

Synergy identification

and sizing

8


What is the greatest benefit to using data analytics in

your M&A transaction?

Why data analytics

in M&A?

There are plenty of reasons

businesses use data analytics.

But why use analytics

approaches in M&A? Gaining

deeper insights tops the list.

Here’s what our respondents said.

(n=483)

11%

10%

18%

26%

35%Gaining deeper

insights

Improved efficiency

in the data analysis

Getting answers

more quickly

Ability to visualize

trends and anomalies

No benefit/

Do not use

9


How important do you feel data analytics will be to your

company’s M&A activity in the next three years?

How important could

it be in the future?

Is interest in data analytics

waning, or could it continue to be

a force? In the world of M&A,

most expect it to remain important

over the next three years,

with 61% indicating that it will

be “very important”.

(n=483)

9%

2%

5%

22%

61%Very important

Somewhat important

A little important

Not important at all

Don’t know/

not applicable

83%

10


What types of data does your company

typically explore with data analytics?

What types of data

are used?

Structured or unstructured?

In the world of data

analytics, it can make a big

difference. And in M&A, so

far structured data is relied

on more heavily than

unstructured.


40%

6%

39%

5%

10%

Structured Unstructured Both Neither Don’t know/ Not sure

11

Respondent profile


v

Occupation

and role(n=483)

Owner of a business Working full-time

for a company

Current occupation Title or role12%

2%

0%

10%

2%

3%

5%

1%

8%

12%

6%

5%

11%

0%

3%

3%

2%

2%

10%

Owner

Operating Partner

Board member

CEO/President

COO

CFO

CTO/CIO

Other C-level executive

Senior Managing Director

Managing Director

Head of business unit or department

Senior Vice President

Vice President

Principal

Controller

Senior Director

Senior Associate

Associate

Director

17%

83%


v

(n=292)

Functional area

Title and

function

37%

63%

5%

13%

9%

6%

1%

16%

7%

31%

11%

Corporate development

Finance

HR

Marketing

M&A

Sales

Strategy

Operations

OtherC-suite, including

owners/ partners

Other

Title


(n=483)

Company

profile

The Manufacturing sector

accounted for the highest

proportion (18%) of the firms

surveyed, followed by

Financial Services/Real Estate

(17%) and

Technology/Telecom/Media

and Entertainment (15%).

What is your company’s

primary industry?

18%

17%

15%

13%

11%

9%

4%

12%

Manufacturing

Financial Services/

Real Estate

Technology/ Telecommunications/

Media & Entertainment

Retail & Distribution

Energy/ Alternative Energy/

Resources & Mining

Other/ Travel,

Hospitality & Leisure

Construction

Life Sciences/ Health Care

Providers & Plans

15


(n=483)

Company

revenue

The median annual revenue of

respondents’ companies is

between $250 million and just

under $500 million.

What is the annual revenue

of your company?

$10 million to

less than $50 million

$50 million to


$250 million to


$500 million to

less than $1 billion

$1 billion to less

than $5 billion

$5 billion or more 10%

14%

16%

16%

28%

17%

16

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