AI Enhanced Due Diligence Workflow for Mergers and Acquisitions

AI-Enhanced Due Diligence for Mergers and Acquisitions

1. Preparation Phase

1.1 Define Objectives

Establish the goals of the due diligence process, identifying key areas of focus such as financial, legal, operational, and compliance issues.

1.2 Assemble Due Diligence Team

Form a cross-functional team comprising legal, financial, and operational experts.

1.3 Select AI Tools

Choose appropriate AI-driven tools to facilitate the due diligence process. Examples include:

• Kira Systems: Utilizes machine learning to extract and analyze data from contracts and other documents.
• Luminance: Leverages AI to read and understand legal documents, identifying risks and anomalies.

2. Data Collection Phase

2.1 Identify Data Sources

Determine the necessary data sources, including financial statements, contracts, and regulatory filings.

2.2 Automate Data Gathering

Utilize AI tools to automate the collection of relevant documents and data. For example:

• Everlaw: Facilitates the collection and organization of documents for review.

3. Data Analysis Phase

3.1 Document Review

Employ AI-driven document review tools to analyze large volumes of documents rapidly.

• RAVN: Uses AI to categorize and summarize documents, highlighting key information.

3.2 Risk Assessment

Utilize predictive analytics to assess potential risks associated with the target company.

• LexisNexis Risk Solutions: Provides insights into regulatory compliance and potential legal issues.

4. Reporting Phase

4.1 Generate Due Diligence Report

Compile findings into a comprehensive report using AI tools to enhance clarity and presentation.

• DocuSign Insight: Automates the report generation process, ensuring accuracy and efficiency.

4.2 Review and Finalize Report

Conduct a final review of the report with the due diligence team, incorporating feedback and adjustments as necessary.

5. Decision-Making Phase

5.1 Present Findings

Present the due diligence report to stakeholders, highlighting key findings and recommendations.

5.2 Make Informed Decisions

Utilize insights gained from the AI-enhanced due diligence process to make informed decisions regarding the merger or acquisition.

6. Post-Merger Integration

6.1 Monitor Integration Progress

Implement AI tools to monitor the integration process and identify any emerging issues.

• Tableau: Can be used to visualize integration metrics and track performance against targets.

6.2 Continuous Improvement

Utilize feedback and data analytics to refine future due diligence processes and improve efficiency.