Legal Process Outsourcing
Streamlining M&A processes with efficient contract management
Mergers and acquisitions (M&A) are complex business transactions that involve various legal, financial, and operational considerations. These may include evaluating potential contractual risks, assessing regulatory requirements, integrating vendor contracts, aligning SLAs, and managing the rights to intellectual property. Today’s fast-paced business environment demands modern solutions to streamline M&A contract management processes, ensure that due diligence is accurate and efficient, and equip stakeholders with the necessary information to make critical decisions during the merger or acquisition process. This is where contract lifecycle management (CLM) services come in.
Modern CLM software has the potential to significantly speed up M&A processes while also ensuring accuracy and compliance, reducing risk, and streamlining the integration of contract portfolios. Businesses can leverage contemporary tools and technologies such as automation and AI into the contract management process. Let’s take a closer look at how today’s cutting-edge CLM solutions can benefit organisations at various stages of M&A transactions.
Preparing for a merger or acquisition
Businesses must undertake comprehensive due diligence to evaluate the financial, operational and legal facets of potential target organisations well before a merger or acquisition is put into motion. CLM solutions greatly simplify this process by consolidating contract databases, undertaking detailed contract analyses, and uncovering risks and opportunities. By leveraging automated workflows and document handling procedures, CLM systems fast-track the due diligence process and ensure each contractual commitment aligns with the business’s long-term strategic goals.
Negotiations
Today’s CLM solutions offer legal, financial, and operational teams a centralised platform where they can collaborate and harmonise contract terms with the M&A transaction’s framework. Not only does CLM software ensure transparency, but it also automates the content drafting and creation process while also ensuring that all involved parties have access to the latest updates and revisions. This streamlining of the entire contract management cycle improves negotiations and speeds up the timeline for closing deals.
Contract migration and data extraction
A crucial aspect of the M&A process is the migration of legacy contracts from the acquired business, which are often stored in various formats and locations, into a single, centralised system. AI-enabled CLM solutions are capable of intelligently extracting and analysing multiple clauses, terms, and obligations within these contracts, and highlighting those that are relevant or need a review from the legal teams. Once digitised, these contracts are stored in a centralised location from where the CLM software can access and manage them.
Financial due diligence
Evaluating a target organisation’s financial viability is a large part of an M&A transaction, and AI-driven CLM systems enhance this process by offering deeper insights into contract values and transactional context. Unlike traditional due diligence methods that are time-consuming and don’t go beyond current contract values, CLM solutions take into account various other parameters, such as contract execution times, renewal and termination dates, and historical data to accurately predict potential risk levels. This provides decision-makers with detailed insights that aid them in crafting strategies and making informed decisions.
Contract integration
After a merger or acquisition deal closes, CLM software smoothly integrates and consolidates contracts from both organisations to optimise resources and eliminate redundancies. The system also ensures regulatory compliance with industry standards. Once the merger or acquisition is complete, CLM software works to align contractual obligations, organisational cultures, and operational processes while monitoring performance against established benchmarks. In addition, post-merger compliance tasks are streamlined with the help of automated alerts to minimise business disruptions and ensure that operations continue smoothly and without interruption.
How can Infosys BPM help optimise your M&A process?
Infosys BPM offers end-to-end contract services to streamline contract management processes, reduce risks, and ensure compliance. Our solutions enhance visibility with advanced analytics, improve cost efficiency through automation, and are scalable to meet the needs of various business sizes, allowing organisations to focus on core activities while we manage contract complexities.
