How increased digitisation has changed the M&A landscape

There is no denying that our lives and the way we work has changed significantly over recent years, and no less so is the impact that the acceleration of the rise of the digital economy has had. This was initially driven by the lockdown restrictions which saw the majority of businesses switching to an online approach, such as working from home, conducting meetings online or even taking their first foray into ecommerce. This shift, and the technologies available to enable it, allowed businesses to stay connected to their clients, win new ones, and in many cases even diversify their products and services to grow with the changing business landscape around them.

The M&A market was not exempt from these changes, with many advisers adopting new technologies to stay connected with buyers, sellers and each other to provide the same seamless process. Online conferencing software such as Zoom or Microsoft Teams came to the forefront, enabling M&A advisers and professionals to deliver an intimate and intricate service from afar. Increased adoption rates also saw the overall value of the already strong technology sector growing at an accelerated rate. KBS Corporate saw a 77% increase in completed sales for technology-based companies between January 2021 and March 2022 compared to the same period prior. A similar trend was echoed in the UK M&A market at large, with notable examples including Babble’s acquisitions of Halo Communications and Digital Communication Systems – advised by Knight CF, part of K3 Capital Group’s M&A Division alongside KBS Corporate – taking the total number of deals completed by Babble to nine within a twelve-month period, and UK-based Cybersecurity start-up Immersive Labs multimillion-dollar acquisition of US-based Snap Labs.

Understandably, there was an initial downturn in deal completions during Q2 2020, but the adaptability of M&A saw momentum build throughout the latter stages of 2020, resulting in a record period for M&A throughout 2021 on both a national and global scale.

The changes implemented at KBS Corporate over the past two years has seen the M&A Division of our Group thrive by quickly adapting to the changing world around us, completing over 330 deals within 2021 alone. These included increased use of technologies, such as virtual meetings, which not only allowed us to continue business during national lockdowns but allows us to offer more flexibility to our employees and clients. In addition to this, technologies such as data rooms allow us to better understand our clients’ businesses and allow for the seamless and secure transfer of information critical to completion of the deal, enabling us to enhance the overall service and ultimately maximise deal values. Distribution and presentation of marketing documentation to new clients, existing clients and potential purchasers is largely facilitated virtually, allowing us to further build on delivering the same excellent standard with quicker turnaround, an interactive experience, and a positive environmental impact due to less reliance on printing and posting.

The use of technologies throughout the transaction process is ultimately an integral ingredient in the overall success of the deal, and in turn has contributed for a record period of dealmaking at KBS Corporate as we connect with more clients and buyers the world over, bringing them together with ease.

Increased digitisation has unrefutably changed the M&A landscape in recent years, and the data would argue that this has been for the better.