--- title: The Challenges of Contracts in Mergers and Acquisitions description: In mergers and acquisitions, contracts can be tedious and complicated to manage. How can companies use AI-based contract analysis to aid in M&A? image: https://blog.linksquares.com/hubfs/Imported_Blog_Media/1965794.jpg --- [Skip to content](https://blog.linksquares.com/challenges-of-contracts-in-merger-acquisition#main-content) [LinkSquares](https://blog.linksquares.com/) Open Mobile Menu [LinkSquares](https://linksquares.com/) Close Mobile Menu [Why LinkSquares](https://linksquares.com/why-linksquares/) [Products](https://linksquares.com/products/) --- [The LinkSquares Cloud One platform for all your in-house legal needs](https://linksquares.com/products/linksquares-cloud/) --- Contract Lifecycle Management Create, review, manage and sign contracts Legal Project Management Centralize your work and keep projects moving Cross-product capabilities Get scalability, efficiency and connectivity LinkSquares Onboarding Experience A step by step guide to get started today --- [Solutions](https://linksquares.com/solutions/) [Customer Stories](https://linksquares.com/customers/) Resources Content [LinkSquares+ Content curated for in-house leaders](https://linksquares.com/plus/) [The Library](https://linksquares.com/library/) In the studio [Demo Library](https://linksquares.com/demo-library/) Community & Events [Customer Stories](https://linksquares.com/customers/) [Events & Webinars](https://linksquares.com/events/) Learning [Blog](https://blog.linksquares.com/) [In-House Insights](https://linksquares.com/inhouse-insights/) [Knowledge Base](https://help.linksquares.com/) [Events](https://linksquares.com/events/) [About Us](https://linksquares.com/about-us/) [Careers](https://linksquares.com/careers/) [Press](https://blog.linksquares.com/tag/linksquares-news-press) [Pricing](https://linksquares.com/pricing/) [Request a demo](https://linksquares.com/demo-request/) Back Close Mobile Menu [Contract Lifecycle Management](https://linksquares.com/products/) [Finalize Streamline your contract creation process](https://linksquares.com/products/finalize/) [Sign Get your contracts executed faster](https://linksquares.com/products/sign/) [Analyze Your post-signature analytics & repository](https://linksquares.com/products/analyze/) [CLM Suite One platform to rule them all](https://linksquares.com/products/) [Request a demo](https://linksquares.com/demo-request/) Back Close Mobile Menu [Legal Project Management](https://linksquares.com/products/) [Prioritize Manage, track, and report on legal work in one place](https://linksquares.com/products/prioritize/) [Request a demo](https://linksquares.com/demo-request/) Back Close Mobile Menu [Cross-product capabilities](https://linksquares.com/products/) [LinkAI Predictive and generative AI](https://linksquares.com/products/analyze/features/ai/) [Integrations Connect the tools you love](https://linksquares.com/integrations/) [Reporting Improve your teams efficiency with KPIs](https://linksquares.com/products/analyze/features/dashboard/) [API Integrate with any third-party app](https://linksquares.com/integrations/linksquares-api/) [Request a demo](https://linksquares.com/demo-request/) Back Close Mobile Menu [Cross-product capabilities](https://linksquares.com/products/) [Onboarding We're here for you from day one](https://linksquares.com/onboarding-services/) [Services Short on time? 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Of course, there are employee concerns and company culture challenges that arise, but there are also a large amount of technical concerns that come with a merger or acquisition. In fact, LinkSquares was born out of the contract analysis complications that the company’s founders faced in previous roles while their company underwent an acquisition. Vishal Sunak, [LinkSquares CEO and co-founder](https://blog.linksquares.com/2019/03/07/linksquares-raises-4-8m-seed-extension/), says, “In 2014, my co-founder Chris Combs and I were working at Backupify, seeing and hearing first hand the process it took to be acquired by Datto. It was during this transaction we first felt the pain of wishing we had better insight into our executed customer agreements, as they were big areas of interest to the acquiring company. Given our limited tracking of very specific data points related to our agreements and the lack of tools in the market focused on post-signature contract analysis, we knew deep down that somewhere in all that mess there had to be a better way to quickly understand the contracts we had agreed to – and reading thousands of them one at a time definitely wasn’t the answer.” [Legal and Corporate teams](https://blog.linksquares.com/2019/02/22/how-ai-is-streamlining-processes-for-legal-professionals/) face these issues on a regular basis, often with outdated technology that may not be able to handle the smart contracts of today’s business world. How can companies proactively manage these M&A challenges? ## Due Diligence Before a deal is finalized, the companies involved follow a process known as due diligence. During this time, the acquiring party takes an in depth look into the soon-to-be-acquired company’s assets and financial performance. The acquiring party will also look into human resources, customer, legal records and more. Throughout this process, the team must review a wide array of contracts in a short amount of time. Given the tedious process of analyzing the terms in each contract, companies are turning to [AI-based contract analysis tools](https://blog.linksquares.com/2019/03/01/contract-analysis-for-finance-teams/) to manage this massive task. In the short term, this saves them time and money spent on outside counsel to review the documents. In the long term, an AI-based solution gives both companies peace of mind that nothing was missed in the process due to normal human error, and establishes a system for them to continue this type of efficient, automated contract review. ## Payment Terms and Accounting Review During Mergers and Acquisitions, proactive financial management is vital, as shareholders are watching closely. The pressure is on for legal and [finance teams](https://blog.linksquares.com/2019/03/01/contract-analysis-for-finance-teams/) to produce complete records of payment terms and other important accounting records. Reviewing these contracts also helps to ensure that payments don’t fall behind and that cash flow remains as expected. However, for a large company, the number of financial contracts can easily reach the thousands. Without any insight into the terms of these contracts, manual review can take weeks of valuable time for finance and legal teams. However, companies are turning to AI to do the work of these teams in a fraction of the time. With contract analysis software like LinkSquares, the process of reviewing payment terms within contracts is simplified, and teams have more time to manage other aspects of the merger. ## Finding the Right Contract Analysis Tool With all the information that needs to be managed during an [M&A process](https://blog.linksquares.com/2016/07/26/fundraising-ma-due-diligence/), utilizing reliable, precise software is vital to ensuring consistency and accuracy. The majority of companies have incorporated cloud-based software to ease the transition without the use of cumbersome physical servers to store the data. A cloud-based contract analysis tool like LinkSquares can simplify the process, giving valuable hours back to your team. By using an AI-based contract analysis tool, transition teams can avoid the time-consuming manual process of reviewing contracts. Instead, let the AI do the work while your team focuses on other aspects of the transition. With LinkSquares, your team won’t have to spend time sorting and tagging documents or reviewing them for key data and clauses, making the mergers and acquisitions process smoother than it has ever been. ## Don’t Just Take Our Word For It Kensho, a machine learning and analytics platform for the finance industry, made the Forbes 50 Fintech list in 2018. Shortly after the list was released, S&P Global acquired Kensho for a record $550 million, the most ever spent to acquire an AI company at the time. After evaluating a number of contract management tools to handle the due diligence process, [Kensho turned to LinkSquares](https://linksquares.com/customers/). By utilizing the search and tagging tools available within the platform, Kensho was able to access contracts with speed and precision. Ultimately, the move to LinkSquares saved time and valuable resources, all while simplifying the transitional period for both companies involved. You can read more about Kensho’s experience in this customer story. All in all, while the M&A process can be intimidating and complex, proactively managing contracts with an AI-based contract analysis platform simplifies the process enormously. Without this solution, time and resources that could have been allocated to other critical preparations become tied up in tedious contract review. If you’d like to learn more about how LinkSquares can help with your Merger or Acquisition, [request a free demo with our team](https://linksquares.com). [![New call-to-action](https://no-cache.hubspot.com/cta/default/6934676/881ede00-4557-4b56-9d79-5a887c3357a6.png)](https://cta-redirect.hubspot.com/cta/redirect/6934676/881ede00-4557-4b56-9d79-5a887c3357a6) ![avatar](https://blog.linksquares.com/hs-fs/hubfs/Vishal%20Sunak.png?width=290&name=Vishal%20Sunak.png) #### [Vishal Sunak](https://blog.linksquares.com/author/vishal-sunak) Vishal Sunak is the co-founder and CEO of LinkSquares. ## Subscribe to the LinkSquares Blog Stay up to date on best practices for GCs and legal teams, current events, legal tech, and more. ## Related Articles ### [Vishal Sunak Mar 01, 2019 5 min read Contract Analysis for Finance Teams We’re sure you’ve heard the phrase “time is money,” and in the finance world, it’s certainly true. Finance teams manage a vast ... Start Reading](https://blog.linksquares.com/2019/03/01/contract-analysis-for-finance-teams) ### [Vishal Sunak Jun 02, 2020 6 min read Introducing Finalize, Our Contract Automation Solution Today, I'm excited to announce that LinkSquares has introduced Finalize, our new contract automation solution. We've designed ... Start Reading](https://blog.linksquares.com/linksquares-contract-automation-solution) ### [Emily Weiner Oct 24, 2023 7 min read Managing Your Contract Management Process After you’ve agreed on terms, gotten final approval from stakeholders, and signed on the (virtual) dotted line, you’ve ... 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How can companies use AI-based contract analysis to aid in M&A?", "author" : { "@type" : "Person", "name" : "Vishal Sunak" }, "dateModified" : "2024-01-18T17:43:08Z", "datePublished" : "2019-03-13T16:15:29Z", "headline" : "The Challenges of Contracts in Mergers and Acquisitions", "image" : "https://cdn2.hubspot.net/hubfs/6934676/Imported_Blog_Media/1965794.jpg", "inLanguage" : "en", "keywords" : "[Contract Management]", "mainEntityOfPage" : { "@type" : "WebPage" }, "name" : "The Challenges of Contracts in Mergers and Acquisitions", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://6934676.fs1.hubspotusercontent-na1.net/hubfs/6934676/Navigation/logo_643dd1b1.svg" }, "name" : "LinkSquares" }, "text" : "Mergers and Acquisitions are an influential aspect of the business world, but these major transitions can cause incredible amounts of stress for those involved. Of course, there are employee concerns and company culture challenges that arise, but there are also a large amount of technical concerns that come with a merger or acquisition. In fact, LinkSquares was born out of the contract analysis complications that the company’s founders faced in previous roles while their company underwent an acquisition. Vishal Sunak, LinkSquares CEO and co-founder, says, “In 2014, my co-founder Chris Combs and I were working at Backupify, seeing and hearing first hand the process it took to be acquired by Datto. It was during this transaction we first felt the pain of wishing we had better insight into our executed customer agreements, as they were big areas of interest to the acquiring company. Given our limited tracking of very specific data points related to our agreements and the lack of tools in the market focused on post-signature contract analysis, we knew deep down that somewhere in all that mess there had to be a better way to quickly understand the contracts we had agreed to – and reading thousands of them one at a time definitely wasn’t the answer.” Legal and Corporate teams face these issues on a regular basis, often with outdated technology that may not be able to handle the smart contracts of today’s business world. How can companies proactively manage these M&A challenges? Due Diligence Before a deal is finalized, the companies involved follow a process known as due diligence. During this time, the acquiring party takes an in depth look into the soon-to-be-acquired company’s assets and financial performance. The acquiring party will also look into human resources, customer, legal records and more. Throughout this process, the team must review a wide array of contracts in a short amount of time. Given the tedious process of analyzing the terms in each contract, companies are turning to AI-based contract analysis tools to manage this massive task. In the short term, this saves them time and money spent on outside counsel to review the documents. In the long term, an AI-based solution gives both companies peace of mind that nothing was missed in the process due to normal human error, and establishes a system for them to continue this type of efficient, automated contract review. Payment Terms and Accounting Review During Mergers and Acquisitions, proactive financial management is vital, as shareholders are watching closely. The pressure is on for legal and finance teams to produce complete records of payment terms and other important accounting records. Reviewing these contracts also helps to ensure that payments don’t fall behind and that cash flow remains as expected. However, for a large company, the number of financial contracts can easily reach the thousands. Without any insight into the terms of these contracts, manual review can take weeks of valuable time for finance and legal teams. However, companies are turning to AI to do the work of these teams in a fraction of the time. With contract analysis software like LinkSquares, the process of reviewing payment terms within contracts is simplified, and teams have more time to manage other aspects of the merger. Finding the Right Contract Analysis Tool With all the information that needs to be managed during an M&A process, utilizing reliable, precise software is vital to ensuring consistency and accuracy. The majority of companies have incorporated cloud-based software to ease the transition without the use of cumbersome physical servers to store the data. A cloud-based contract analysis tool like LinkSquares can simplify the process, giving valuable hours back to your team. By using an AI-based contract analysis tool, transition teams can avoid the time-consuming manual process of reviewing contracts. Instead, let the AI do the work while your team focuses on other aspects of the transition. With LinkSquares, your team won’t have to spend time sorting and tagging documents or reviewing them for key data and clauses, making the mergers and acquisitions process smoother than it has ever been. Don’t Just Take Our Word For It Kensho, a machine learning and analytics platform for the finance industry, made the Forbes 50 Fintech list in 2018. Shortly after the list was released, S&P Global acquired Kensho for a record $550 million, the most ever spent to acquire an AI company at the time. After evaluating a number of contract management tools to handle the due diligence process, Kensho turned to LinkSquares. By utilizing the search and tagging tools available within the platform, Kensho was able to access contracts with speed and precision. Ultimately, the move to LinkSquares saved time and valuable resources, all while simplifying the transitional period for both companies involved. You can read more about Kensho’s experience in this customer story. All in all, while the M&A process can be intimidating and complex, proactively managing contracts with an AI-based contract analysis platform simplifies the process enormously. Without this solution, time and resources that could have been allocated to other critical preparations become tied up in tedious contract review. If you’d like to learn more about how LinkSquares can help with your Merger or Acquisition, request a free demo with our team.", "url" : "https://blog.linksquares.com/challenges-of-contracts-in-merger-acquisition", "wordCount" : "1248" } ```