An M&A deal can take up to 9 months — even longer for bigger companies. It’s months on end of talking to investors and the board, negotiating and renegotiating, and organizing internal documents to share between buyers and sellers.
The finance and legal departments often carry the brunt of this weight, so they need to collaborate efficiently to ensure the process runs smoothly.
With all the government regulations and financial requirements needed to properly pull off an M&A deal, ad hoc processes and spreadsheets won’t be enough, and 9 months is a long time to just wing it.
Contract Lifecycle Management (CLM) software helps finance and legal departments align their processes for smoother M&A activity. CLM increases visibility into business contracts and other legal documents, helping finance teams assess risk and enabling legal to streamline due diligence.
Here are 4 ways legal and finance departments can use CLM to collaborate for smoother M&A transactions.
Integrate CLM with File Sharing Tools
If finance and legal departments are going to work well together, they each need to have access to the other’s business-critical documents. Integrating CLM with file sharing tools like Google Drive and SharePoint means legal and finance can forgo the back and forth of asking each other for contracts, filings, and other important docs, because they’re all accessible within their respective tools. This saves both teams time and improves the quality of the data they have access to.
Use a Searchable Repository to Conduct Due Diligence
Due diligence is a crucial part of the M&A process, as it helps buyers investigate the true value of the acquisition. During this process, the buying company audits the seller’s finances, annual revenue, customer base, litigation history, IP, and other business data to determine how beneficial — or risky — the investment will be. Most of this information is stored inside business contracts, so a CLM with a centralized, searchable repository makes information gathering for due diligence a breeze.
Report on Risk Using Contract Analytics
Legal and finance departments also collaborate to analyze risk in M&A deals. Both teams need to have a comprehensive understanding of what risks come with the acquisition and how they will impact the business long-term. The best CLM software comes with reporting and contract analysis functions that allow legal and finance to generate reports based on contract data. As a result, they can report on liability, compliance, and even the likelihood of churn seamlessly and with greater accuracy.
Prepare for Fundraising with End-to-End CLM
With file sharing, a searchable repository, and contract analytics, legal and finance departments have everything they need to attract investors and buyers. CLM provides centralized storage for your contracts and other key documents, enabling your legal and finance departments to generate documentation that proves financial stability, go-to-market fit, and company performance and secure funding.
Takeaways
CLM makes collaboration between legal and finance teams simple, helping them successfully seal M&A deals with synergy and effectiveness. See how LinkSquares CLM can help improve cross-functional collaboration in your business. Request a demo today.
