Buying a UK business these days doesn’t just mean focusing on your target’s financial performance and the strength of its market position. As technology continues to evolve at break-neck pace, it also means keeping a keen eye on artificial intelligence and data ownership. After all, these are becoming critical components in the M&A process, and their importance should not be underestimated.
Understanding how to navigate these technological complexities during a deal can make all the difference between a straightforward outcome – or an acquisition that comes with some unique (but preventable) challenges.
To help you, we’ve compiled this list of handy insider tips and tricks to help you master the topic of AI in UK M&A deals.
Tip 1. Assess your target’s AI adoption
Your first task should be to analyse your target’s present-day AI adoption. As the technology becomes more sophisticated at seemingly warp speed, increasing numbers of British businesses are using AI in various forms. These range from website chatbots to content creation tools like Chat GPT, as well as AI-powered data analysis.
It’s important to work out what AI tools your target company uses and to what extent their operations rely on those tools. Having a clear picture of the extent of their AI implementation will help you calculate the company’s value and its growth potential.
Tip 2. Evaluate the quality and ownership of data
One of the valuable assets you’ll acquire through your deal is the target’s data. However, not all data is created equal, so you’ll need to verify both the quality and the ownership of that data.
Ask the seller what kinds of data the business currently holds and what it uses that data for. You should also ascertain who the legal owner of that data is and assess the compliance of the company when it comes to the gathering and usage of its data.
After all, you don’t to end up buying a business that illegally stores and uses sensitive information, in breach of legislation such as GDPR. Inheriting that kind of compliance issue could land you in serious difficulties post-sale and potentially damage the reputation of your new investment.
Tip 3. Explore your target’s IP rights
The subject of IP and AI is a thorny one that continues to be immensely complex from a legal standpoint.
As a result, when you embark on an acquisition of a business involved in the use – or training – of AI, it’s crucial that you:
- Identify any copyrights, patents and trademarks they may have that are related to AI tech.
- Ascertain the ownership of this IP.
- Familiarise yourself with any current licensing agreements and/or partnerships and evaluate the impact they would have on your deal.
It’s important to ensure that all your target’s data and IP will remain legally protected post-sale.
Tip 4. Analyse their data security
Data privacy and security are of paramount importance in any M&A deal, but particularly so when the deal involves a target that relies on AI or heavy use of digital data.
Consequently, during the due diligence phase of the M&A process, you need to fully investigate your target’s data security and its compliance. This means finding out how the company protects its data against breaches and whether it has any historic or current data leaks. It also involves an evaluation of how the company adheres to data protection laws.
As things currently stand, AI can be something of a mixed blessing when it comes to data security. On the one hand, AI can help to automate threat detection and response; on the other hand, it can be subject to unique weaknesses which can leave sensitive information exposed to hackers.
Tip 5. Prioritise seamless integration
For reasons of both security and efficiency, it’s important to carefully plan the integration process post-sale. Seamlessly integrating your target’s AI tools and data will help you to begin your new chapter on the right footing. It’s also vital that you prevent any leaks or technological disorganisation during the integration phase.
This is where careful planning and preparation becomes essential. Create a strategic roadmap for the integration period that will align your target’s AI and data usage with your existing company’s.
You should also identify technological synergies between the two businesses and work out how to optimise them in those crucial weeks and months post-purchase.
Finally, be sure to prepare some appropriate change management initiatives and offer adequate training to your new and existing teams if need be.
By focusing on making the integration period a success, you prime your new acquisition for straightforward growth and innovation – and a bright future as your newest investment.
How a business broker can help
If you are feeling intimidated by the potential threats and pitfalls of integrating new AI and managing data ownership effectively, don’t worry. You don’t have to go it alone! An experienced and reliable business broker (like us right here at Harris Acquire!) can untangle these complexities on your behalf and offer invaluable expertise and advice.
Not only that, but we can handle the entire acquisition on your behalf, from start to finish. This includes finding and vetting potential candidates for acquisition – according to your ideal investment profile – filling out tricky paperwork, mediating with the seller, and assisting with negotiations and due diligence.
Best of all, you can make the most of our exclusive 30-day money-back guarantee, which offers total peace of mind as you embark on your acquisition.
To find out more, give us a call on 01926 757100 or send an email to Hello@harrisacquire.com. We look forward to hearing from you!
