PwC's Decision Analytics Platform cuts due diligence time by 40%

01 March 2021 4 min. read

Decision Analytics Platform is a data driven tool developed by PwC on the Microsoft Azure tech-backbone– aimed at better processing financial information during mergers and acquisitions (M&A).

PwC drew on its own experience to build the platform: the Big Four accounting and advisory firm supports hundreds of transactions each year with due diligence – a process where a company’s financials are thoroughly examined to determine worth and value before closing a deal.

An imperative for both buyers and sellers, due diligence is a mammoth task often crammed into a sprint of days or weeks – leaving the door open for oversight and nasty surprises down the transaction timeline. With the Decision Analytics Platform (DAP), PwC has already mitigated these issues for over 150 deals worldwide, with plans to touch 400 by June 2021.

Charlie Pickett and Rob Silverwood - PwC

PwC Australia Director Charlie Pickett is in charge of the DAP project. For him, the solution improves due diligence in several ways – the first being time. Some due diligence projects draw more than 30 million rows of data from a client – supplemented by PwC’s own research using a variety of third-party and public data sets.

“Previously, we might’ve said, ‘actually, that’s quite a big dataset’. Now we just ingest it and deal with it as a matter of course,” said Pickett. According to PwC Australia deals leader Rob Silverwood – who spoke to the Australian Financial Review (AFR) – due diligence times have been cut by more than 40% by using technology to process data pools.

Then there is the collaborative potential of DAP, which allows several teams to work with the same data on a common platform in real time. “The killer use-case and benefit is having the same, single source of truth, the consistent platform experience, and the ability to give clients access to it as well,” said Pickett.

“We can give access to bidders. We can give access to advisors. We can give access to our clients, all in a managed and secure way.” An example is Quadrant Private Equity’s $100 million pick up of pre-packaged foods company My Muscle Chef in October last year – where due diligence was powered by DAP.

“We gave Quadrant access to the data and the platform that sits underneath it, so they could actually pull out their own analysis. Given the time pressures we were under, this was invaluable,” said Pickett.

Beyond due diligence

Last on the list of DAP pros is that it goes beyond just due diligence. The tool was originally developed to inform crunch “yes or no” decisions with speed during M&A. That said, the versatility of financial data produced can be leveraged across the transaction value chain – from due diligence to negotiation and agreement.

Even after the deal is completed, PwC can use insights to advise a new merged entity on the best way forward. “We are helping our clients use data to make better data-informed decisions.” What’s more, DAP frees up the necessary manpower to serve this broader mandate.

“Using the technology means you slip down the amount of time you’re spending on the transformation work and you can spend your time on the insight and decision making,” Pickett told AFR.

Global launch

DAP has already been deployed in nearly eight markets, and targeted expansion is on the cards. A key advantage here is access to Microsoft Azure’s sixty-plus global data centres, allowing PwC to serve across a variety of data jurisdictions. Helping things along in the backdrop is resilience in the global M&A market.

Despite a devastating economic downturn from Covid-19, a host of distressed deals, inklings of an economic recovery and a restructuring drive to position for the new normal have combined to keep M&A activity strong in recent months.

Per Mergermarket reports, global M&A activity fell 13% in the first half of last year, but had recovered to nearly $2 trillion in deal value by October. Australia is witnessing a similar M&A rebound, having clocked nearly 300 deals last year adding up to over $20 billion in value.

All this amid growing challenges for proper due diligence due to travel and office restrictions. These obstacles will persist at least through the start of this year, while volumes continue their steep climb. Combined, these conditions pave the path to global success for PwC’s new DAP solution.