Highlights
- Organizations can leverage cloud services to simplify and accelerate the execution of mergers and acquisitions (M&A).
- Doing so can help them achieve seamless post-transaction integrations and separations, and avoid unnecessary sunk costs during M&A deal execution.
- Organizations need to implement a cloud strategy that is aligned with their M&A goals and considers factors such as data security, integration requirements, and post-transaction scalability.
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M&A with cloud
Cloud is a game changer in mergers and acquisitions (M&A) execution.
Executing M&A transactions and divestments involves complex processes that require significant time, resources, and expertise. By unlocking cloud’s transformative potential, organizations can simplify and accelerate M&A deal execution. It’s a significant, multi-year transformation journey that changes how work is carried out, modifies how businesses are run, and impacts core business processes for organizations.
To derive maximum benefits from a deal execution, organizations need to choose cloud services that meet the specific and time-critical needs of the M&A deal. While traditional infrastructure and services delivery time frames are time-consuming, cloud allows for services to be deployed in minutes. Although enterprise controls extend these timelines, using cloud technology makes the end-to-end process quicker.
Two cloud services are most suited for M&A execution. The first, infrastructure-as-a-service (IaaS), offers scalable and flexible IT infrastructure to optimize on-demand computing resources during M&A activities. Another, software-as-a-service (SaaS), makes available ready-made applications and services for consumption. These include collaboration tools, document management systems, and project management platforms for seamless communication and coordination among stakeholders during M&A activities.
Multifold advantages
Cloud services provide greater speed of delivery, enhanced security, and compliance, and more in M&A deal execution.
It’s critical to move at speed and meet challenging deadlines agreed with market and senior stakeholders when executing M&A transactions. With cloud services, organizations can:
- Reduce work related to sizing, selection, procurement, and configuration or avoid them altogether, thereby reducing the overall delivery timelines.
- Deliver new infrastructure and services at pace, improve due diligence, and enhance collaboration during M&A-specific activities.
- Avoid unnecessary capital spending on assets that are not required after M&A transactions or that needlessly lock buyers into platforms and solutions they would otherwise not have chosen.
- Enable greenfield or completely new deployments in corporate transactions. Take carveouts, for instance, where new, standalone IT services are needed—the speed and simplicity of cloud deployments offer significant benefits.
- Use standardized tooling and delivery patterns with enhanced out-of-the-box and in-built security features, ensuring compliance.
- Deliver secure, regulatory-compliant solutions at pace, leveraging readily available cloud patterns from cloud service providers. This is vital in M&A transactions, because commercially sensitive data is shared as part of due diligence and integration planning.
Optimized integration
Cloud offers a basis for longer-term, post-transaction integration beyond Day 1.
The realization of cost savings and synergy indicates the success of most M&A transactions. Organizations that leverage cloud services can demonstrate these benefits faster after transactions. The speed, agility, and scalability of cloud gives post-merger organizations an unparalleled opportunity to deliver consolidation and integration wins.
New entities should identify workloads and functions where integration brings the most value and accordingly make initial investments. This will allow them to deliver quicker wins, communicate a significant success story—both internally and externally—and build support for the merger. Moreover, the scalability and flexibility of cloud allows them to adjust infrastructure and services to meet changing business needs, avoiding unnecessary commitments and wasted sunk costs associated with traditional technology infrastructure and services that rely on capital investments.
Future prospects
Organizations can accelerate M&A execution and optimize post-transaction integration with a cloud strategy aligned with their M&A goals.
Cloud platforms and tools can support M&A deals in all stages of the deal life cycle. This not only accelerates execution, but it also helps realize benefits post-transaction. Organizations can streamline due diligence, enhance data security, and optimize post-transaction integration with cloud infrastructure, applications, and services.
For the best results, organizations should put in place a cloud strategy aligned with their M&A goals, considering factors such as data security, integration requirements, and post-transaction scalability.
When implementing this strategy, organizations can team up with partners that can help them with valuable insights, knowledge of M&A, and technical expertise.
The execution of M&A deals calls for speed, flexibility, and eliminating unnecessary effort and costs. Therefore, organizations need to adopt cloud not just for their core operations, but also to accelerate and simplify M&A deal execution.
