Like most areas of investment banking, mergers and acquisitions (M&A) are complex and sophisticated. M&A deal teams often work on deals over the course of years, managing the relevant relationships and keeping tabs on every moving part over that entire period. To add to the complication, deal teams often manage more than one deal at a time.
This is where the right M&A pipeline management software helps teams, while the wrong software can hinder performance and productivity. From managing multiple deals simultaneously to keeping important relationships front and center, a good software solution can make a big difference in winning and closing more high-quality deals.
In this guide, you’ll learn how the best investment banks simplify and streamline complex M&A pipeline management and use software solutions to drive deals more efficiently while making the most of their relationship network.
What is M&A pipeline management?
While the terms “mergers” and “acquisitions” are often used interchangeably, they differ in meaning and the deal management processes used.
A merger occurs when two companies agree to merge into one entity and operate as a single, consolidated company going forward. An acquisition, on the other hand, occurs when one company purchases another, establishing itself as the new owner.
From a pipeline management and deal flow standpoint, both merger and acquisition deal processes are complex in their own right. M&A pipeline management is the process investment banking firms use to manage deal opportunities and track them across the M&A deal lifecycle. Often, this is managed with a visual layout—a dashboard, Kanban board, or even an Excel table—that allows deal team members to see every opportunity in each stage of the dealmaking process.
The M&A pipeline workflow
Managing a successful M&A pipeline can be complicated. Each deal has many moving parts, and most teams manage multiple deals at once. To make the process as efficient as possible, it’s essential to establish standard M&A pipeline workflows.
Let’s explore the seven common stages every M&A deal will pass through when in the pipeline.
- Deal sourcing: The M&A pipeline begins with deal sourcing. At this stage, you identify target companies for acquisition based on predetermined criteria. Acquirers must analyze everything from strategic fit and financial performance to competition to ensure they build a target list with qualified prospects.
- Connecting with prospects: Now, it’s time to start building relationships with your prospects. This involves collecting preliminary information and building a solid foundation before moving forward.
- Analysis of prospect (value and strategic fit): This is the information-gathering stage of the pipeline. The deal team is tasked with collecting as much information as possible about the prospect. Teams look at publicly available real-time metrics and data sources to start building a picture of the company that can help them make an informed decision.
- Due diligence: While stage 3 moves forward without an NDA, the due diligence process kicks off with one. Once the NDA is signed, deal teams ask prospects for confidential information to uncover potential challenges before moving the deal forward.
- Transaction: If due diligence reports no insurmountable challenges, the M&A deal team moves forward with a purchase agreement and financial transaction.
- Closing: When the purchase agreement is finalized, both parties sign the documents, and the deal is officially closed.
- Integration: Now, it’s time to integrate both companies into one and facilitate the change in ownership.
What is M&A pipeline management software?
Pipeline management is a fundamental activity for investment banking teams, so pipeline management software is a fundamental tool to have. M&A deal pipeline management software allows deal teams to track deal activity across the deal lifecycle, get a bird’s-eye view of the opportunities they’re tracking, and get a detailed view of the activity (and people) involved in every deal.
Most pipeline management software solutions today have basic dashboards that work well for traditional sales funnels and more transactional deals in industries like retail or SaaS sales.
Modern investment banking firms, however, have non-linear, long-term, relationship-driven M&A processes that don’t resemble traditional sales funnels. Teams in relationship-focused industries rely on pipeline management software to help them track, organize, and win deals over the course of months or years. Their pipeline management solution must also be flexible and customizable to work with their unique workflows and processes. M&A software platforms, then, are different from basic sales management tools.
Benefits of M&A pipeline software platforms for investment banking firms
Pipeline software designed for mergers and acquisitions helps M&A dealmakers move faster, track more, communicate better, and get the best deals for their clients and stakeholders. With an intelligent deal management pipeline that improves your ability to find, manage, and close more deals, your team should gain the following:
At-a-glance views of all deals across the entire deal lifecycle
Your deal team can instantly see recent activity on any active opportunities and how many deals are in each stage of your deal pipeline. Some M&A software solutions also allow you to customize your management process with different views—from lists to Kanban boards to reporting dashboards—which can give you a wider variety of insights into how deals are flowing. From deal sourcing to the due diligence process and from handshake to post-merger integration, M&A transactions move more easily with the right pipeline management tools.
A single source of truth
M&A pipeline software centralizes deal data, and with everyone working on the same platform, it eliminates information silos across your organization. However, remember that any pipeline management software requiring manual data entry will leave room for incomplete and incorrect data—it’s only a single source of truth when human error isn’t part of the equation. Look for a platform that automates contact and activity data entry.
Actionable, data-driven insights
Manual, legacy technology won’t give you the insights you need to close deals. A core part of intelligent M&A pipeline management software is having access to analytics and reporting features that give your team insight into team performance, additional details on people and organizations drawn from external data partners, and combining these details with your current and historical deal pipeline to improve the decision-making process and close more deals.
Improved brand perception
Modern pipeline management software is a brand differentiator that allows your team to tell your business’s story through intelligent CRM data and showcase your value to prospective clients.
How M&A pipeline management software works
With M&A pipeline management software, your deal team can track all their deals and details in one place. Contact information, notes, engagement activity, and reminders for important dates are all immediately accessible. Some pipeline management software also offers project management, task management, outreach, due diligence, and marketing functionalities.
Most importantly, pipeline management software gives your team confidence in your data accuracy, so you can focus on complementary rather than overlapping work. By outsourcing your data management work to intelligent pipeline management technology, you don’t have to worry about valuable deal information getting lost in scattered spreadsheets during the corporate development process.
5 best M&A pipeline management software
Finding the right M&A pipeline management software for your needs is essential to streamline the process and close more deals successfully. These five platforms can help you get the most out of your deal team.
1. Sourcescrub
Sourcescrub is a deal discovery platform with a database of 190,000 sources at 15 million companies. It helps deal teams find a contact in their network so they can kick off a chain of introductions that leads back to their key contact. Beyond contact information, Sourcescrub gives you information about the company, including its growth intent, key corporate milestones, and events and tradeshows your prospective companies plan to attend.
Pricing is available upon request. There are three service tiers: Essentials, Plus, and Professionals.
2. Datasite
Datasite focuses on virtual data rooms, ensuring a secure environment to share critical information during the M&A deal process. It also features a comprehensive document management system, so users can upload, manage, and organize documents easily. Teams can update document and user permissions in real time or schedule them in advance. Datasite also features 24/7/365 customer support in 20+ languages, making it easy to get support when needed.
Pricing is $0.60 for each page uploaded. While this model is transparent, it can lead to unexpected costs.
3. DealRoom
DealRoom has the ability to help you manage one deal or many. It helps manage the entire deal lifecycle, including pipeline management, due diligence activities, document exchange via VDR, and post-merger integration work. If you’re looking for a user-friendly option, DealRoom has 10 pre-made diligence workflow templates you can use to get started quickly. With multiple integrations including Salesforce, Slack, Okta, and more, you have the ability to customize the platform to your needs.
There are three pricing tiers:
- Single Project: $1,495 per month
- Pipeline: Starting at $11,995 per year
- Execution Suite: Custom pricing
4. Midaxo
Midaxo is a cloud-based platform that simplifies and centralizes the entire deal process. It enables dealmakers to execute post-merger integrations quickly and efficiently. Teams can manage, visualize, and track synergies and deal progress from start to finish within the software. The platform does not have API integration, which limits your ability to customize the solution to match your needs.
Pricing is available upon request.
5. Affinity
M&A is relationship-driven, and your team must have pipeline management software that supports this and streamlines the processes that make up the complex, non-linear life cycle of M&A financial transactions.
Affinity’s relationship intelligence CRM is purpose-built for M&A teams and enables your team to use their personal networks to find, manage, and close deals faster—all with software that every team member will find easy to use.
Affinity can extract historical data from your existing pipeline management system(s) and can be up and running quickly—often in only a few days. Once onboard, the platform can automatically capture the “data exhaust”—details that are automatically captured from email communications, meetings, and contact information such as names, roles, industry, and source of introduction—of every relationship you’re managing right alongside active deal pipelines.
When your business development is supported by Affinity, you can make your team more efficient and provide in-depth insights into every opportunity. This will allow you to connect with confidence, show up smarter, and close your next deal faster.
There are four pricing tiers:
- Essential: $2,000 per year/per user
- Scale: $2,300 per year/per user
- Advanced: $2,700 per year/per user
- Enterprise: Contact us for pricing
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M&A pipeline management software FAQs
What is pipeline management software?
M&A deal pipeline management software allows deal teams to track activity across each deal's lifecycle. It also gives a bird's-eye view of the opportunities they’re monitoring and a view of the activity involved in each deal.
What is an M&A pipeline?
An M&A pipeline is the sequence of events that all M&A deals go through. Most pipelines start with deal sourcing, move to acquisition strategy and planning, and then move into due diligence, negotiations, and finally, closing the deal and integrating.
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