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

v
Occupation
and role
(n=483)
Owner of a business Working full-time
for a company
Current occupation Title or role
12%
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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Deloitte M&A focus on: Analytics survey findings

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