According to a recent study by Accenture, 751% of private equity leaders say that investments have become more complex over the past five years, while 831% agree that the current approach to due diligence has significant room for improvement.
The consultancy raised three critical factors that transform the current due diligence into a more dynamic process geared towards generating value:
1. Get a complete overview of the company to be acquired:
Discovering gaps in target companies’ capabilities, processes or technology is a common challenge, highlighted by 40% of Accenture’s respondents. Connecting insights before the deal strengthens the value creation plan and justifies higher offers.
2. Do more with less
Companies that use technology to screen targets and perform due diligence gain agility and depth in their analyses. Almost 621% of leaders believe that tools such as data analytics and AI will fundamentally transform these processes.
3. Increase the capabilities of leaders
Leadership capability gaps at portfolio companies have become a critical barrier to value creation, cited by 47% of leaders. With disruptive technological advances, CEOs with technology backgrounds are better equipped to manage change. According to Accenture, these leaders generated a five-year revenue CAGR of 23.9%, 1.4x higher than CEOs without this background. Read the full article from Accenture: It's time to rethink private equity due diligence
