Before the pandemic, businesses exploring a merger were already conducting much of the financial due diligence virtually. A report by EY suggests that trend is getting even deeper, with partners turning to more data-intensive due diligence efforts. Companies are getting granular, looking even at lines of code and historical transaction data.
But the pandemic presents hurdles to proper information-gathering: Site visits may be impossible, or done virtually, leaving holes. Some firms are opting to ensure their teams mesh well in person before signing paperwork.
Europe's largest digital agency, Dept, was already in acquisition talks with Basic, a 150-person web and mobile agency based in San Diego, San Francisco, and St. Louis, when the pandemic hit. Travel restrictions and distancing rules slowed the momentum.
"You decide to do a deal based on a few hygiene factors," says Dimi Albers, the chief executive of Dept. "But in the end, for us at least, it's a cultural thing. That means getting together in a room. You need to do it somewhere in the process."